Kathmandu. The credit flow from banks and financial institutions to the private sector has been increasing in recent times, according to the data of the Nepal Rastra Bank. The credit flow, which has been sluggish for a long time, has increased in the nine months of the fiscal year 2081/82.
In the last 9 months, the credit flow from banks and financial institutions to the private sector has increased by 361.03 billion (7.1 percent).
In the same period last year, such credit had increased by 222.21 billion (4.6 percent). On an annualized basis, credit flow from banks and financial institutions to the private sector has increased by 8.3 percent as of mid-2081 Chaitra.
In mid-2081 Chaitra, the share of credit flowed to the non-financial institutional sector was 63.4 percent and the share of credit flowed to the individual and household sector was 36.6 percent. In the same period of the previous year, such shares were 62.7 percent and 37.3 percent, respectively.
Among the loans to the private sector, the loans of commercial banks increased by 7.4 percent, those of development banks by 4.6 percent, and those of finance companies by 6.4 percent.
As of mid-March 2081, 14.6 percent of the loans invested by banks and financial institutions were secured by current assets, i.e., agricultural and non-agricultural goods, while 65.2 percent were secured by real estate. In mid-Chait 2080, the share of loans disbursed against such collateral was 11.4 percent and 67.6 percent, respectively.
In the first nine months of the fiscal year 2081/82, loans to the industrial production sector increased by 9.6 percent, loans to the construction sector by 11.4 percent, loans to the wholesale and retail trade sector by 5.2 percent, loans to the transport, communication and public services sector by 10.2 percent, loans to the service industry sector by 8.6 percent, and loans to the consumer sector by 8.3 percent.
During the review period, term loans from banks and financial institutions increased by 4.9 percent, margin loans by 37.8 percent, trust receipt (import) loans by 60.6 percent, hire purchase loans by 4.1 percent, cash flow loans by 5.2 percent and real estate loans (including personal residential home loans) by 4.9 percent, while overdraft loans have decreased by 12.1 percent, according to Nepal Rastra Bank data.
According to the Rastra Bank, banks and financial institutions have collected deposits of Rs 368.47 billion in the first nine months of the current fiscal year. This is an increase of 5.7 percent compared to mid-Ashar last year. As of Chaitra last year, the deposit collection of banks and financial institutions had increased by 49.4 billion (7.2 percent).
During the review period, the NRB has infused liquidity of 484.71 billion rupees by net purchasing 363 million US dollars from the foreign exchange market (commercial banks). In the same period of the previous year, it had infused liquidity of 566.55 billion rupees by net purchasing 426 million US dollars from the foreign exchange market.
Similarly, the NRB has sold 2.84 billion US dollars and purchased 386.81 billion Indian rupees. In the same period of the previous year, it had sold 2.76 billion US dollars and purchased 366.99 billion Indian rupees.
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