Deposits of the commercial banks have surged by Rs 26 billion between the end of February till the end of March, while their lending increased only by Rs 5 billion, according to the latest data of Nepal Bankers Association (NBA).
The commercial banks have mobilized a total of Rs 1,128 billion worth of deposits and floated loans worth Rs 842 billion by the end of the March.
The deposit mobilization had increased by Rs 20 billion to Rs 1,102 billion until the end of February from Rs 1082 billion through January end, while lending had increased by Rs 11 billion to Rs 837 billion from Rs 826 billion during the same period. The banks had collected deposits worth Rs 1,102 billion t and extended a total of Rs 837 billion in loans until the end of the February.
Bankers attribute the liquidity surplus in banks to increase in government´s capital expenditure and stagnant share market, among other things. As the third quarter is approaching an end, banks focus on loan recovery rather than aggressive lending.
A senior level official of one of the commercial banks told Republica that the share investors have started depositing their money in the banks and financial institutions rather than pouring their investments in the share market. “The loan demands from investors have also decreased as big investors are still in a wait-and-watch mode due to lack of investment choice,” the banker added.
“Since the government has started increasing its capital spending and reimbursed the payments to the contractor, the money is arriving in the banks. This has increased deposits in banks,” said Bhuvan Dahal, Chief Executive Officer (CEO) of Sanima Bank.
Though the Nepal Rastra Bank (NRB) has been employing the reverse repo measure to mop up excessive liquidity, such measures have not been able to resolve the liquidity surplus in banks. According to NRB, it has mopped up net liquidity of Rs 177 billion from the banks and financial institutions within the first seven months of current fiscal year. The liquidity surplus has also brought down the interbank lending rate and interest rate of the reverse repo. The NRB has lately issued reverse repo worth Rs 19 billion on April 2. The interest rate was fixed at 0.072 percent while the interbank lending rate has stood 0.2 percent as of March 28.
source:republica,5 april 2014
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The commercial banks have mobilized a total of Rs 1,128 billion worth of deposits and floated loans worth Rs 842 billion by the end of the March.
The deposit mobilization had increased by Rs 20 billion to Rs 1,102 billion until the end of February from Rs 1082 billion through January end, while lending had increased by Rs 11 billion to Rs 837 billion from Rs 826 billion during the same period. The banks had collected deposits worth Rs 1,102 billion t and extended a total of Rs 837 billion in loans until the end of the February.
Bankers attribute the liquidity surplus in banks to increase in government´s capital expenditure and stagnant share market, among other things. As the third quarter is approaching an end, banks focus on loan recovery rather than aggressive lending.
A senior level official of one of the commercial banks told Republica that the share investors have started depositing their money in the banks and financial institutions rather than pouring their investments in the share market. “The loan demands from investors have also decreased as big investors are still in a wait-and-watch mode due to lack of investment choice,” the banker added.
“Since the government has started increasing its capital spending and reimbursed the payments to the contractor, the money is arriving in the banks. This has increased deposits in banks,” said Bhuvan Dahal, Chief Executive Officer (CEO) of Sanima Bank.
Though the Nepal Rastra Bank (NRB) has been employing the reverse repo measure to mop up excessive liquidity, such measures have not been able to resolve the liquidity surplus in banks. According to NRB, it has mopped up net liquidity of Rs 177 billion from the banks and financial institutions within the first seven months of current fiscal year. The liquidity surplus has also brought down the interbank lending rate and interest rate of the reverse repo. The NRB has lately issued reverse repo worth Rs 19 billion on April 2. The interest rate was fixed at 0.072 percent while the interbank lending rate has stood 0.2 percent as of March 28.
source:republica,5 april 2014
LINK
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