KATHMANDU, Dec 2: Banks are contemplating to lower the interest rates on loans further as the sector has a surplus amount of loanable funds with them.

KATHMANDU, Nov 12: Private sector lending by Nepali banks and financial institutions (BFIs) increased by Rs 109.03 billion in the first three months of the current fiscal year.

KATHMANDU, Oct 29: A total of Rs 76 billion was mobilized out of the country’s banking system for Dashain and other festivals.

KATHMANDU, Sept 20: A total of 8,849 individuals and firms were blacklisted in the first two months of the current fiscal year, on charge of check bounce and defaulting bank loans.

KATHMANDU, Sept 18: A number of banks have raised their interest rates for the months of mid-September and mid-October despite the banks being reported to have sufficient loanable funds amid slow demand for loans.

KATHMANDU, September 2: Banks in Nepal have significantly expanded their investments in real estate loans. In the past fiscal year, commercial banks collectively invested over Rs 217 billion in real estate, as per the latest data from the Nepal Rastra Bank (NRB).

In FY 2022/23, banks earned net profits of Rs 70.17 billion, while they can distribute their shareholders only Rs 31.90 billion in dividend.

With the introduction of Automated Teller Machines (ATMs) in the 1960s, the banking industry took its first step toward automation. In Nepal, ATMs were first introduced in 1995 by Himalayan Bank Limited. Following ATMs, banks began to computerize their offices, reducing the need for physical information records.

Commercial banks are overwhelmed with an increasing liquidity

KATHMANDU, July 7: Nepal Rastra Bank (NRB) has directed banks and financial institutions to extend Saturday services for the next two weeks in view of the closure of the current Fiscal Year (FY) 2022/23.

KATHMANDU, April 11: While Nepali banks have been piled up with an excess amount of loanable funds, they are unable to increase investment due to low demand for credit caused by exorbitant interest rates.

KATHMANDU, April 8: The deposit collection by the commercial banks increased Rs 34 billion in the past three weeks.

KATHMANDU, April 3: Nepali commercial banks have taken loans of Rs 59.17 billion from foreign companies in the past five years.

KATHMANDU, March 30: Nepal Bankers’ Association (NBA) on Thursday said the bad debts of banks are likely to increase significantly in the future.

KATHMANDU, March 18: Commercial banks of the country earned profits of over Rs 39.39 billion in the first seven months of the current fiscal year.

KATHMANDU, Feb 16: Commercial banks collected deposits worth Rs 25 billion in the past one month between mid-January and mid-February.

Taming High Interest Rates

December 16, 2022 07:30 am

The survey reports of the private sector unveil a bleak picture of the economy. Manufacturers of construction materials are operating at 30 percent of their capacity, consumption of essentials has gone down by 18 percent and restaurants’ business by 20 percent, among others. These provide some evidence of how the economy is affected.

KATHMANDU, Dec 12: The Nepal Rastra Bank’s (NRB) Governor Maha Prasad Adhikari on Monday said that the liquidity problem in the country’s banking system has gradually been solved.

KATHMANDU, Dec 8: The government in a bid to implement the hedging rule has asked the banks concerned to submit their business plans.

KATHMANDU, Dec 7: Nepali banks have started receiving some respite in their liquidity position with an increased deposit collection recently.

KATHMANDU, Nov 29: Nepal Rastra Bank (NRB) has taken action against a number of commercial banks found involved in misconduct in their daily operations.

KATHMANDU, Nov 22: Twenty six commercial banks of Nepal collected deposits of Rs 16 billion in one month between mid-October and mid-November, giving some respite to the Nepali banking sector, which has been struggling to maintain their liquidity position.

KATHMANDU, Nov 15: Nepali commercial banks have decided not to increase interest rates for next one month citing the current situation in the country’s financial market and soaring inflation.

KATHMANDU, Nov 10: The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has requested all its chapters to stop the protest against the high interest rates. Keeping in mind that the House of Representatives and provincial assembly elections are going to be held on November 20, the FNCCI has requested all province chapters and member organizations to suspend the currently ongoing protest programs.

KATHMANDU, Nov 7: Deposit collection by the commercial banks in the country increased by Rs 21 billion last week, while the lending amount declined by Rs 1 billion during the period.

KATHMANDU, Nov 1: The nonperforming loans (NPL) of Nepali commercial banks have increased by a notable amount in the first three months of the current fiscal year, after the borrowers failed to pay back the banks’ loans on time due to excessive interest rates.

KATHMANDU, Nov 1: The new lending rates adopted by the commercial banks of the country that came into effect on Tuesday, October 18, demonstrate a rise from those employed previously. Creditors now have to pay as much as 18 percent interest rate for the money they borrow from banks. With soaring inflation and depleting foreign reserves, the increase in the lending rates reflects a liquidity crisis in the country that does not seem to have de-escalated with time.

KATHMANDU, Oct 22: Commercial banks collected additional deposits of Rs 61.64 billion last month, while they lent additional Rs 30.04 billion during the period.

KATHMANDU, OCT 15: Commercial banks are likely not to raise the interest rate on their deposit collection in the next month after the recently increased interest rate failed to attract the deposit collection.

KATHMANDU, Sept 24: The Credit to Deposit (CD) ratio with banks has come down to 87.30 percent from over the threshold of 90 percent a few weeks ago.

KATHMANDU, Sept 22: Banks have been facing widespread criticism from people from different quarters after they raised the interest rates.

KATHMANDU, Sept 15: Nepali commercial banks will be raising their interest rates on fixed deposits after the Nepal Bankers’ Association (NBA) decided not to intervene in the banks to fix their interest rates.

KATHMANDU, Sept 7: The government is extending the timeline allowing banks to consider up to 80 percent of the reserve funds of local governments in their deposit by another six months, citing the deepening liquidity crisis with the banks.

KATHMANDU, Sept 3: Nepal Rastra Bank (NRB) Governor Maha Prasad Adhikari said the liquidity crisis with banks can be corrected only with an improvement in the country’s balance of payments (BoP) position and government’s increased expenses on a periodic basis.

KATHMANDU, August 7: Commercial banks have agreed on not revising the interest rate until mid-October, citing the rules recently enforced by Nepal Rastra Bank (NRB).

KATHMANDU, August 6: Nepali commercial banks increased their net profit by 23.14 percent in the last fiscal year as compared to that of the amount in 2020/21 despite facing shortage of loanable funds for almost a year.

KATHMANDU, August 3: Nepal Rastra Bank (NRB) has removed the ceiling on the cash dividends that the banks and financial institutions (BFIs) provide to their shareholders.

KATHMANDU, July 20: Commercial banks got some respite from the pressure of liquidity crunch in the last month of the last fiscal year as they gathered additional deposits worth Rs 141 billion in their system compared to a drop in loans issuance in one month of mid-June and mid-July.

KATHMANDU, June 28: The banks and financial institutions (BFIs) collected deposits of Rs 5 billion in the past one month.

KATHMANDU, June 14: Nepali commercial banks earned profits of Rs 58.33 billion in the first 10 months of the current fiscal year despite facing a notable shortfall in loanable funds during the period.

KATHMANDU, April 16: Banks provided interest-subsidized loans worth Rs 215.76 billion in the first eight months of the current fiscal year.

KATHMANDU, April 10: The commercial banks in the country have agreed not to open the letter of credit (LC) for the import of non-essential goods, in line with the instruction issued by Nepal Rastra Bank (NRB) last week.

KATHMANDU, March 13: Commercial banks have agreed not to hike the interest rate on their deposits from mid-March to mid-April.

KYIV, Feb 27: Western allies announced sweeping new sanctions against Moscow on Saturday, including kicking key Russian banks off the main global payments system, as a defiant President Volodymyr Zelenskiy said Ukrainian forces were repelling Russian troops advancing on Kyiv.

KATHMANDU, Feb 21: Commercial banks were able to increase their deposits by mere Rs 1 billion last week after they raised the interest rate on deposits to attract more funds.

KATHMANDU, Feb 12: Banks are increasing the interest rate on deposits citing the tight liquidity position in the country’s banking system.

KATHMANDU, Feb 8: Banks’ improper policies for deposit collection and mobilization, besides many other factors, has been found to be responsible for the ongoing problem of liquidity shortage.

KATHMANDU, Jan 27: Commercial banks were able to increase their profits by 10.09 percent in the first six months of the current fiscal year.

KATHMANDU, Jan 22: The commercial banks have raised their base interest rate on loans by more than two point percent effective from mid January, citing an increase in their expenses for the interest on deposits.

KATHMANDU, Jan 11: Commercial banks were able to collect additional deposits of Rs 59 billion over the past one week, which has given the banks some cushion at a time when they have been facing a liquidity shortfall.