Last moment government expenditure increases deposits in bank; Commercial bank’s deposit rises by 3 kharba 50 arba and loan by Rs 3 kharba 55 arba

Commercial banks of the country have increased the deposit by 16% while their credit disbursement by 20%. A total of Rs 350 arba of deposits have been increased as of Asar 29 by the A class banks.

A total of Rs 80 arba deposits have been increased with in the last month with a maximum increase in the last week of the fiscal year. The deposits have reached to Rs 24 kharba 37 arba from the amount of Rs 23 kharba 90 arba in the last week.

However, such rapid increment is not seen in the credit disbursement as the total loan disbursement has increased by Rs 22 arba. Although commercial banks might not have been abided by NRB’s direction in terms of deposit collection, these banks have met the target of credit disbursement by attaining 20%.

Within the whole FY 2074/75, banks have increased a loan of Rs 3 kharba 55 arba which exceeds deposit collection by Rs 5 arba. The total loan of banks amount to Rs 20 kharba 90 arba.

The reason for the increased deposit can be attributed to the accelerated expenditure of government for development activities. The same trend has been seen since last year. Such events often lead to higher interest rate in banks as the banks do aggressive lending once deposits is increased.

Nepal Rastra Bank has aimed to increase the credit by 20% for which commercial banks require Rs 4 kharba 18 arba credit and Rs 6 arba as deposit.