Deposits at BFIs expands by 19.5% & credit to private sector by BFIs expands by 21.1% by mid May 2016

Deposits at BFIs increased 11.9 percent in the review period (10 months) compared to a growth of 12.4 percent in the same period of the previous year. Deposits at commercial banks and Development banks increased 12 percent and 7.3 percent, respectively, during the review period. On year-on-year basis, deposits at BFIs expanded 19.5 percent in mid-May 2016. Whereas, credit to the private sector from Banks and Financial Institutions (BFIs) increased 16.2percent in the review period, compared to an increase of 15 percent in the same period of the previous year. In the review period, private sector credit from commercial banks, development banks and finance companies increased 17.6 percent, 12.9 percent and 3.2 percent respectively. On year-on-year basis, credit to the private sector from BFIs increased 21.1 percent in mid-May 2016. Credit disbursement in major sectors such as agriculture, productions, and construction and service industries remained lower than that of the previous year. Credit to the agriculture sector increased 13.6 percent, industrial production sector, 12.5percent, construction sector 12.3 percent, service industries 10.9 percent, wholesale and retail trade sector 18percent, transport, communication and public sector 27.5percent in the review period. Of the total outstanding credit of banks and financial institutions, 61.5percent is against the collateral of land and building and 14.2 percent against the collateral of current assets (such as agricultural and non-agricultural products). Such ratios were 59.6 percent and 12.9percent respectively in the same period of the previous year. The credit from BFIs to real estate sector amounted to Rs. 233.80billion (including Rs. 133.91billion residential home loans less than Rs. 10million each) in mid-May2016. This is 14.8percent of total credit exposure of BFIs. As at mid-May 2016, the BFIs' total margin lending extended against the collateral of shares stood at 2 percent (Rs. 32.21billion) of their total credit exposure. Of the total lending of the commercial banks, the credit to small and medium enterprises is only 2.5percent (Rs. 32.92billion) in the review period. T.R. (Trust Receipt) loan extended by commercial banks increased 27percent (Rs. 14.88billion) in the review period compared to a growth of 21.1percent in the same period of the previous year