What is the overall status of deposits and credit of BFIs? See the result as per the data of Nepal Rastra Bank

For every banks and financial institutions, irrespective of its capital size or area coverage, the main function is to provide loans and to receive deposits. In an overall scenario, the business of the banks and financial institutions have increased.

Deposits:

As per the yearly report published by Nepal Rastra Bank, the deposit collection of the Banks and Financial Institutions have increased by 19.20%. The deposit collection had increased by 14% in the FY 2073/74.

Of the total deposits at BFIs, while the share of saving deposits fell to 34.5 percent from 35.4 percent, the share of demand deposits increased to 9.3 percent from 8.7 percent and fixed deposits increased to 44.8 percent from previous 43.2%.

Credit:

Credit disbursement of the banks and financial institutions increased in case of the disbursement to the private sector. The credit to private sector increased by 22.5% in the reviewed year while the increment was only of 18.2% in the FY 2073/74. Private sector credit from commercial banks, development banks and finance companies increased 22.3 percent, 25.6 percent and 16.1 percent respectively.

Credit to the agriculture sector increased 50.8 percent, industrial production sector 20.6 percent, construction sector 19.3 percent, wholesale and retail trade sector 22.4 percent, service sector industries 26.3 percent and transport, communication and public sector 26.7 percent in the review year.

As per the report of the Rastra Bank, the most used collateral against the credit is land and building which occupy 61.7% of the total collateral. Only 14.4% of the total loans were made against the collateral of current assets (like agricultural and non-agricultural products).