Last-minute development activities increase deposits

Increase in government expenses in Asadh has slightly improved deposit in banks. Until the end of Asadh 2074, government expenses including capital expenditure stood at Rs 7.18 kharba. The figure stood at only Rs 5.54 kharba until the first week of Asadh. This increase in expenses as a result of increase in development activities in the last month of fiscal year has increased deposits in all banks. As per Banker’s Association, deposit base in commercial banks had actually decreased in the last week of Jestha. Slow pace of development activities and the subsequent budget surplus had led to accumulation of huge money in government’s accounts. Entire deposit of commercial banks stood at only Rs 18.69 kharba at the end of Jestha which had increased to Rs 19.04 kharba in mid-Asadh. However, bankers say that this increase is still not satisfactory to show in figures. It will still take significant increase in deposits for banks to able to disburse loans. Commercial Banks have started to provide as much as 9% interest in savings accounts due to shortage of investable funds in hopes of attracting deposits. Bankers have also said NRB’s decision to limit institutional deposits is also a big hurdle for attracting deposits.