Six months overview of deposit collection & credit disbursement

Deposit Collection: As per the report of Nepal Rastra Bank, Deposits at BFIs increased by 6 percent in the review period. Deposits at commercial banks, development banks and finance companies increased by 6.1 percent, 2.5 percent and 4.7 percent respectively in the review period. On year-on-year basis, deposits at BFIs expanded by 20.1 percent in mid-January 2016. Credit Disbursement: The credit to the private sector increased by 5.8 percent in the review period compared to an increase of 11.6 percent in the same period of the previous year. Private sector credit from commercial banks, development banks and finance companies increased by 6.6 percent, 2.2 percent and 3.1 percent respectively in the review period. On y-o-y basis, credit to the private sector from BFIs increased by 13.6 percent in mid-January 2016. 42. Credit disbursement in major areas such as industrial production, wholesale and retail trade and agriculture remained lower than that of the previous year. Credit to the industrial production sector increased by 5.4 percent, wholesale and retail trade sector by 4.4 percent, construction sector by 4.1 percent, transport, communication and public sector by 14 percent and agriculture sector by 2 percent in the review period. In six months of 2015/16, banks and financial institutions extended 59.8 percent of their total credit against the collateral of land and building, and 12.6 percent against the collateral of current assets (such as agricultural and non-agricultural products). Such ratios were 58.8 percent and 13.6 percent respectively in the same period of the previous year. Of the total lending of the commercial banks, the credit to small and medium enterprises is only 2.6 percent (Rs. 31.07 billion) in the review period. Likewise, T. R. (Trust Receipt) loan extended by commercial banks decreased by 13.4 percent (Rs. 7.36 billion) in the review period compared to a growth of 9.5 percent (Rs. 3.93 billion) in the same period of the previous year. This is mainly attributable to the contraction in imports accompanied by disruption in border points and the unrest in southern plain.