Kathmandu, Feb. 11: The deposit mobilisation at Banks and Financial Institutions (BFIs) increased by 6.6 per cent during the first six months of the current fiscal year 2023/24 compared to the same period of the last fiscal year.

According to the latest macroeconomic and financial report of Nepal Rastra Bank, the deposit collection at BFIs increased by Rs. 377.07 billion (6.6 per cent) in the review period compared to an increase of Rs. 215.14 billion (4.2 per cent) in the corresponding period of the previous year.

 On a y-o-y basis, deposits at BFIs expanded by 14.9 per cent in mid-January 2024. The share of demand, saving and fixed deposits in total deposits stood at 6.8 per cent, 26.8 per cent and 59.9 per cent respectively in mid-January 2024. 

Such shares were 7.8 per cent, 25.6 per cent and 60.3 per cent respectively a year ago. The share of institutional deposits in total deposits of BFIs stood at 36.6 per cent in mid-January 2024. Such a share was 36.6 per cent in mid-January 2023.

Similarly, the private sector credit from BFIs has increased by 4 per cent during the review period as compared to same period in last fiscal year. The private sector credit from BFIs increased by Rs.192.64 billion (4 per cent) in the review period compared to an increment of Rs. 137.33 billion (3 per cent) in the corresponding period of the previous year. 

On y-o-y basis, credit to the private sector from BFIs increased by 4.9 per cent in mid-January 2024. The shares of private sector credit from BFIs to non-financial corporations and household stand at 63.2 per cent and 36.8 per cent respectively in mid-January 2024. 

Such shares were 64.9 per cent and 35.1 per cent a year ago. In the review period, private sector credit from commercial banks, development banks and finance companies increased by 4 per cent, 4.4 per cent and 2.4 per cent respectively.

In the review period, out of the total outstanding credit of the BFIs, 11.4 per cent is against the collateral of current assets (such as agricultural and non-agricultural products) and 67.7 per cent against land and building. Such ratios were 12.2 per cent and 67.2 per cent respectively a year ago.

In the review period, outstanding loans of BFIs to the agriculture sector loan increased by 1.1 per cent, the production sector by 8 per cent, construction sector by 4.1 per cent, transportation, communication and public sector by 10.6 per cent, wholesale and retail sector by 2 per cent, service industry sector by 4.5 per cent and consumable sector by 7 per cent, said the report.

In the review period, term loans extended by BFIs increased by 13.2 per cent, cash credit loans by 27.5 per cent, trust receipt (import) loans by 5.8 per cent, real estate loans (including residential personal home loans) by 4.7 per cent, and margin nature loan by 10.5 per cent.

However, the overdraft loan extended by BFIs decreased by 41 per cent (mainly due to the reclassification of loans from the last year) and the hire purchase loan decreased by 19.9 per cent during the first six months of the current fiscal year.