Deposits of BFIs increased by 3.9% in FY 2015/16

Current Macroeconomic Situation of Nepal (CMES) report published by Nepal Rastra Bank (NRB) has reported increment in deposits of Banks and Financial Institutions (BFIs). As per the provision of the central bank, commercial banks need to maintain 12 per cent of their total deposit as liquid cash. The deposit rate of BFIs increased by 3.9 percent in FY 2015/16 compared to an increase of 3 percent in the corresponding period of the previous year. Deposits at commercial banks and development banks increased to 4 percent and 4.8 percent respectively, while deposits at finance companies decreased by 11.5 percent. Similarly, credit to the private sector from BFIs increased by 7.4 percent in the FY 2015/16 compared to an increase of 2.7 percent in the same period of the previous year. In the review period, private sector credit from commercial banks and development banks increased 7.8 percent and 9 percent respectively, while finance companies credit to the private sector decreased by 7.2 percent. As at mid-November 2016, the BFIs' total margin lending extended against the collateral of shares which stood at 2.2 percent (Rs. 39.3 billion) of their total credit exposure. Of the total lending of commercial banks, credit to small and medium enterprises was only 2.5 percent (Rs. 37.47 billion) in the review period.