Against the trend of high deposits and slow lending for the past couple of months, loan expansion of the commercial banks have inched up in last two months while the deposit mobilization has remained tight.
According to the data of Nepal Bankers Association (NBA), deposit mobilization of commercial banks has increased by Rs 16 billion rupees in two months to Rs 1132 billion as of mid-May while the loan expansion jumped by Rs 26 billion to Rs 866 billion.
Deposits of the commercial banks had surged by Rs 26 billion between the end of February and the end of March, while their lending increased only by Rs 5 billion.
Bankers attribute the rise in the lending to the demand of loans from the traders for trade financing at the end of the fiscal year. “While we look at the liquidity situation of the banks of last few weeks, the deposit mobilization has remained tight and the loan expansion has increased,” said Kishore Maharjan, chief executive officer (CEO) of Civil Bank Ltd, adding, “Demands for loan generally go up at the end of the fiscal year as the investors wary of possible hikes in the customs or excise duty seek loans for importing raw materials or other goods.”
Ashoke SJB Rana, CEO of Himalayan Bank Limited, said that the loan flow, including in the Small Medium Enterprises (SMEs), have been increasing gradually for the past few months. “We are focusing on small and medium loans to expand our loan portfolio. Out of our total loan portfolio of Rs 43 billion, we have issued loans worth Rs 4 billion to Small Medium Enterprises (SMEs),” Rana told Republica.
Bankers also say that the depreciation of the US dollar against the Nepali rupee has also contributed to the slowdown of the deposit and rise in the lending of the commercial banks. “Since remittance is one of the major economic drivers of the country, this could be a reason for the slowdown in the deposit mobilization of the banks in recent months,” Bhuban Kumar Dahal, CEO of Sanima Bank Ltd, told Republica.
Maharjan echoed Dahal. “The value of Nepali rupee has become stronger recently. This has prompted the traders to import of goods. This has increased banks lending,” said Maharjan.
Dahal, however, cautioned that the liquidity surplus problem of the banks can be exacerbated by the capital spending of the government at the end of the fiscal year. “Banks and financial institutions are still sitting on excessive surplus despite their attempts to increase lending,” he added.
source: republica,24 may 2014
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According to the data of Nepal Bankers Association (NBA), deposit mobilization of commercial banks has increased by Rs 16 billion rupees in two months to Rs 1132 billion as of mid-May while the loan expansion jumped by Rs 26 billion to Rs 866 billion.
Deposits of the commercial banks had surged by Rs 26 billion between the end of February and the end of March, while their lending increased only by Rs 5 billion.
Bankers attribute the rise in the lending to the demand of loans from the traders for trade financing at the end of the fiscal year. “While we look at the liquidity situation of the banks of last few weeks, the deposit mobilization has remained tight and the loan expansion has increased,” said Kishore Maharjan, chief executive officer (CEO) of Civil Bank Ltd, adding, “Demands for loan generally go up at the end of the fiscal year as the investors wary of possible hikes in the customs or excise duty seek loans for importing raw materials or other goods.”
Ashoke SJB Rana, CEO of Himalayan Bank Limited, said that the loan flow, including in the Small Medium Enterprises (SMEs), have been increasing gradually for the past few months. “We are focusing on small and medium loans to expand our loan portfolio. Out of our total loan portfolio of Rs 43 billion, we have issued loans worth Rs 4 billion to Small Medium Enterprises (SMEs),” Rana told Republica.
Bankers also say that the depreciation of the US dollar against the Nepali rupee has also contributed to the slowdown of the deposit and rise in the lending of the commercial banks. “Since remittance is one of the major economic drivers of the country, this could be a reason for the slowdown in the deposit mobilization of the banks in recent months,” Bhuban Kumar Dahal, CEO of Sanima Bank Ltd, told Republica.
Maharjan echoed Dahal. “The value of Nepali rupee has become stronger recently. This has prompted the traders to import of goods. This has increased banks lending,” said Maharjan.
Dahal, however, cautioned that the liquidity surplus problem of the banks can be exacerbated by the capital spending of the government at the end of the fiscal year. “Banks and financial institutions are still sitting on excessive surplus despite their attempts to increase lending,” he added.
source: republica,24 may 2014
LINK
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