KATHMANDU, July 4: The banks and financial institutions (BFIs) in the country, following their failure to provide loans, have accumulated loanable funds worth Rs 793 billion with them.
The BFIs have failed to issue loans as expected mainly due to low demand for credit in the market. According to Gunakar Bhatta, spokesperson for Nepal Rastra Bank (NRB), even the banks not facing the issue of capital adequacy funds have been unable to provide loans in adequate amounts.
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Although the NRB through its monetary policy has targeted to increase private sector lending by 11.5 percent in the current fiscal year, it has reached only 4.7 percent as of the first 11 months. Due to having an excessive amount of loanable funds, the credit-deposit ratio has come down to as low as 79.18 percent against the central bank’s prescribed ceiling of 90 percent.
The records with the NRB show that the BFIs are now having a deposit collection of Rs 6.335 trillion. However, they have issued loans of only Rs 5.149 trillion. In the past one week alone, an additional deposit of Rs 69 billion was collected by the BFIs.
