Liquidity crisis in banks of Nepal

Feb Mon 2022 03:39:36

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Liquidity crisis in banks of Nepal

Kathmandu. Although the threat of corona virus (Covid-19) infection is gradually diminishing, the lack of investable funds (liquidity) in the banks is still continuing. This problem has continued even in the first week of March as the deposit collection of the banks, which have become aggressive in lending, has slowed down.

According to the Nepal Bankers Association, an umbrella organization of the chief executive officers of commercial banks, only one-fourth of the loans have been collected as per the latest figures. Generally, the loan should be less than the bank's deposit. But banks have collected only 25 percent of loans in the last one week.

According to the association, bank deposits have increased by Rs 1 billion in the first week of February. As of the last day of January, deposits in banks stood at Rs 43.11 trillion, an increase of Rs 1 billion to Rs 43.12 trillion.

On the other hand, credit investment has increased by over Rs 4 billion. Debt investment has increased by Rs 4 billion from Rs 4.155 trillion in mid-January to Rs 4.159 trillion in one week