REPUBLICA KATHMANDU, July 4 Commercial banks have slowed down their loan investment as they prepare to close their accounts at the end of the current fiscal year. Deposit flow in the banking system, however, has increased amid rise in government spending. Data compiled by Nepal Bankers Association (NBA) shows that 28 commercial banks extended Rs 17 billion in the past three weeks (between June 8 and June 29), while their deposit rose Rs 41 billion in the same period. With this, total outstanding deposit and loans of these commercial banks has reached Rs 2,377 billion and Rs 2,080 billion as of as of June 29. The recovery in deposit mobilization by commercial banks, who have been suffering from the shortage of lendable fund since long, comes in the wake of the rise in government expenditure at fiscal year-end. Increased government spending pumps more cash into the banking system. According to the data of Financial Comptroller General Office, the government has so far spent 54.26 percent of the capital budget allocated for the current fiscal year. The government has spent Rs 181.88 billion out of Rs 335.18 billion allocated for development spending for FY2017/18. A lion's share of such fund was spent in the past two months. Despite deposits growth, bank lending has slowed in recent days. Bankers say that the slowdown in lending at the fiscal year-end is a natural phenomenon in the banking industry. “Since most of the banks focus on recovery of their loans in the last month of the fiscal year, lending slows down during this time,” Bhuvan Dahal, CEO of Sanima Bank Ltd, said. According to bankers, many investors also do not seek loans during this time when business firms close their book and accounts. Banking industry has been seeing shortage of lendable fund in recent months due to mismatch in their deposits and loan growth. As banks expanded their lending investment sharply despite slow growth in deposit, the credit to core capital cum deposit (CCD) ratio of many banks have reached a saturation level. Nepal Rastra Bank (NRB) requires banks to maintain CCD ratio of 80 percent. Many banks even saw their CCD ratio touching the upper limit, leading to a sharp rise in deposit rates. However, even the increment in deposit rates to over 13 percent failed to bring adequate deposits into the banking system. The skyrocketing interest rates prompted bankers to cap their saving rate at 7 percent and fixed deposit at 12 percent.

KATHMANDU, May 25: Commercial banks are found to be struggling to meet the directed sector lending requirement set by the Nepal Rastrsa Bank (NRB).

KATHMANDU, May 1: Nepal Rastra Bank (NRB) has redefined the tourism sector to enable more areas under this category to get loans from the bank and financial institutions (BFIs).

Deposits grew by Rs 72 billion, while lending saw a rise of Rs 68 billion Q3

KATHMANDU, Jan 24: At a time when bankers are hoping that the Nepal Rastra Bank (NRB) will provide them a relaxation on credit to core-capital-cum-deposit (C-CD) ratio, the central bank has indicated that such prudential lending limit is not going to be tweaked to address the current liquidity problem being faced by bank and financial institutions (BFIs).

Bankers are panicked at the possibility of huge withdrawal of deposits from the system over the next few days for income tax payment and repatriation of profit by Ncell.

KATHMANDU, Dec 29: Due to lack of farsightedness and aggressive lending practices among banks and financial institutions (BFIs), credit is getting very expensive for borrowers.

KATHMANDU, Dec 28: Slow deposit growth has not restrained banks from ramping up their loan disbursements, indicating that lendable funds in the banking industry will soon dry up if the situation does not reverse.

KATHMANDU, Nov 29: Non-performing loans (NPL) of commercial banks slightly increased in the first quarter of the current fiscal year 2017/18 compared to corresponding period of FY 2016/17.

KATHMANDU, Nov 26: Banks have again been aggressively expanding their loans even when their deposit growth has slowed down.

KATHMANDU, Oct 27: Commercial banks pursued aggressive lending policy in the first quarter of Fiscal Year 2017/18 even though their deposit growth in the period remained tepid, data compiled by Nepal Bankers Association (NBA) shows.

KATHMANDU, Aug 30: Credit flow of bank and financial institutions (BFIs) to service industries by 23.3 percent in the last Fiscal Year 2016/17 as tourism and hospitality businesses showed signs of recovery.

KATHMANDU, Aug 17: A new rule introduced by Nepal Rastra Bank (NRB) that no longer allows bank and financial institutions (BFIs) to count interbank deposits for their credit to core capital-cum-deposit (CCD) ratio has made the situation worse for some commercial banks that are already facing shortage of lendable funds.

KATHMANDU, August 9: While banks have observed growth in their deposit volume in recent weeks, bankers say that the skyrocketing interest rates are less likely to come down at least before the second quarter of the current fiscal year 2017/18.

KATHMANDU, July 29: Commercial banks are struggling to meet the directed-sector lending requirement as set by Nepal Rastra Bank (NRB).

KATHMANDU, July 10: Nepal Rastra Bank (NRB) has raised the lending requirement for commercial banks toward productive sectors by 5 percentage points to 25 percent of their total lending.

KATHMANDU, May 10: Banks are struggling to attract deposits despite rise in demands for loans.

KATHMANDU, April 27: Grappled with shortage of lendable funds, bank and financial institutions (BFIs) have tweaked their credit expansion strategy.

KATHMANDU, April 22: Registration of personal vehicles saw a drastic drop in the seventh and eighth of current fiscal year, thanks to tightening bank loans.

CNI concerned at lending rate hike

April 20, 2017 00:20 am

KATHMANDU, April 20: A delegation of Confederation of Nepalese Industries (CNI) on Wednesday met the acting governor of Nepal Rastra Bank (NRB), Chintamani Shiwakoti, and expressed its concern over recent rise on bank lending rates.

KATHMANDU (REPUBLICA): NIC Asia Bank Ltd has started floating deprived sector loans.

BHAIRAHAWA, Feb 22: Rise in lending rates of banks and financial institutions (BFIs) has led to significant drop in import of motor vehicles in the country through Bhairahawa Customs Office.

BIRGUNJ, Feb 20: The impact of rise in lending rates of bank and financial institutions (BFIs) has been felt in revenue collection.

KATHMANDU, Jan 25: Commercial banks are literally left without any money to extend new loans, indicating that credit expansion of most of these banks will come to a grinding halt if they do not receive fresh financing facility.

KATHMANDU, Jan 12: Microfinance institutions (MFIs) will not be allowed to charge borrowers more than 18 percent interest now onwards.

KATHMANDU, Jan 10: As banks and financial institutions (BFIs) up their  'aggressive' lending, Nepal Rastra Bank (NRB) has taken a cautious strategy of tightening liquidity (loan-able funds) to curb any lending binge, particularly in unproductive sectors.

Margin lending rumors lift Nepse

December 3, 2016 00:20 am

KATHMANDU, Dec 3: The Nepal Stock Exchange (Nepse) index jumped 131.01 points this week to close at 1,600.49 points on Thursday -- the last trading day of the week.

KATHMANDU, Sept 3: Loan disbursements of commercial banks surpassed deposit mobilization in the first one and half months of the current fiscal year.

KATHMANDU, Aug 30: Nepal Rastra Bank (NRB) has instructed commercial banks to disburse at least two percent of their total loans to the deprived sector directly by themselves.

Pokhara BFIs tighten realty lending

August 16, 2016 01:30 am

POKHARA, Aug 16: Amid skyrocketing land and housing prices, bank and financial institutions in Pokhara have started tightening loan flow to realty sector fearing further risks.

KATHMANDU, July 19: The central bank's announcement to set countercyclical buffer requirement for commercial banks, as part of implementing the Basel III standard, at a maximum of 2.5 percent has left the bankers worried.

KATHMANDU, July 18: Bankers have taken exception over a new measure in the monetary policy for Fiscal Year 2016/17 that requires them to directly lend 2 percent of their total loans in the deprived sector.

KATHMANDU, June 29: When Josef Einwaller came to Nepal for the first time in 1988 as a tourist, he was mesmerized by the natural beauty of this Himalayan nation situated at the lap of Mount Everest. Since then Josef has visited Nepal for more than 45 times which he says is his second home.

KATHMANDU, June 25:After a long slowdown, loan mobilization by banks is finally moving upward in recent months.