KATHMANDU, June 119: Commercial banks of Nepal issued loans amounting to less than half of their deposit collections over the past 11 months, resulting in a surge in liquidity amid the ongoing economic slowdown.
According to Nepal Rastra Bank (NRB), 20 commercial banks collected additional deposits worth Rs 723 billion between mid-July 2025 and mid-June of the current fiscal year. However, they disbursed only Rs 288 billion in additional loans during the same period.
Lending slows as banks focus on recovery of loans at fiscal yea...
Despite a sharp decline in interest rates, lending has remained subdued. The interest rate on individual fixed deposits fell to as low as 4.27 percent, while the base rate dropped to 5.20 percent. Yet, banks have struggled to expand credit to their clients.
As of mid-June, total deposits of commercial banks stood at Rs 7.253 trillion, while total lending reached Rs 6.531 trillion.
Among individual banks, Prabhu Bank saw its deposits decline by 1.08 percent, while deposits at the remaining 19 banks increased. In terms of lending, Standard Chartered Bank Nepal recorded the steepest fall at 19.79 percent, followed by NIC Asia Bank with an 11.66 percent decline and Prabhu Bank with a 2.14 percent drop.
