Commercial banks issued loans 16 times more than deposits collection in five months of current FY

Published On: December 17, 2021 06:25 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 17: Commercial banks issued additional loans worth Rs 360 billion in the first five months of the current fiscal year, which was more than 16 times their deposit collections over the period.

Nepal Rastra Bank (NRB) records show that the banks’ credit portfolio stood at Rs 4.081 trillion as of mid-December this fiscal year, up from Rs 3.721 trillion recorded in mid-July. But the deposit collection crawled from Rs 4.201 trillion to Rs 4.223 trillion, an increase of Rs 22 billion.

During the review period last year, banks issued additional loans worth Rs 199 billion against their deposits collection of Rs 207 billion.

Amid aggressive lending by the banks, the shortage of loanable funds has loomed in the country’s banking system. As a result, many banks have already stopped issuing new loans to their customers.

According to NRB Spokesperson Gunakar Bhatta, the central bank has given a ceiling for the private sector lending by the banks at 700 billion for the current fiscal year. But the banks have already provided more than half of this amount in just five months. 


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