Most commercial banks in Nepal have kept their interest rates unchanged for Falgun (mid-February to mid-March), with 18 out of 20 banks maintaining the same rates as last month. Only one bank raised its rates, while another lowered them.
The maximum interest rate on individual term deposits remains at an average of 6.001 percent. However, Laxmi Sunrise Bank and Global IME Bank have reduced their rates by 0.25 percentage points.
Despite ample liquidity, loan demand remains low. The total deposits in banks have reached Rs 6.722 trillion, while credit investment stands at Rs 5.428 trillion. The credit-to-deposit (CD) ratio is at 79.44 percent, well below the 90 percent limit set by the central bank.
With excess liquidity in the market, Nepal Rastra Bank (NRB) has been mopping funds through various tools to stabilize interest rates. However, loan investment has not increased as expected, despite favorable conditions.
Similarly, bank loans have increased by Rs 351.31 billion compared to the same period last year. While the total loan amount was Rs 5.083 trillion in the previous fiscal year, it has now risen to Rs 5.433 trillion. Over the past six months, credit has grown by Rs 267 billion (5.2 percent), compared to a 4.2 percent (Rs 204 billion) increase in the same period last year.
While overall lending has increased, some key sectors have seen a decline, according to central bank data. Compared to the first half of the previous fiscal year, term loans, overdraft loans, working capital loans, and hire purchase loans for businesses have slightly decreased.
Meanwhile, share collateral loans rose by Rs 29 billion, and real estate loans increased by Rs 28 billion. Over the last six months, these sectors grew by Rs 23 billion and Rs 5 billion, respectively. Additionally, loans to the industrial sector under term loans increased by Rs 116 billion, service sector loans grew by Rs 61 billion, and import credit rose by Rs 51.87 billion.
