Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Amidst crisis of loanable fund in the financial market, deposit collection of commercial banks has reached an all-time high.
As of September end, total deposits of commercial banks reached Rs 421 billion against Rs 411 billion collected until mid-July.
Despite increasing deposit among banks, banks have been saying that they still face ample loanable money.
“The demand for loans today is so high that banks are continiously facing liquidity crisis despite rise in deposit volume,” informed Bhuwan Dahal, president of Nepal Bankers’ Association (NBA).
Meanwhile, Dahal said that liquidity problem is expected to be addressed in line with increasing inflow of remittance in the country at recent times. This will also help to improve the balance of payments and foreign exchange reserves situation, as per him.
As the government had halted its spending until third week of September due to uncertainty of the Replacement Bill, the market started witnessing liquidity crisis. Government spending is the major source of deposits in banks.
Of late, the government has passed the Replacement Bill from the Parliament and expenditure of the government has resumed, thereby easing the liquidity problem gradually.
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