Kathmandu. Investable capital is accumulating in banks. As the demand for loans has not increased recently, investable capital has been piling up in banks. Due to the economic recession, the demand for loans in banks has not yet increased. As a result, the investable amount in the banks is accumulating unnaturally. At present, banks have accumulated investable capital worth more than 370 million rupees.

According to the statistics of Nepal Rastra Bank, till last Sunday, deposits in commercial, development and finance companies reached 56 trillion 13 billion rupees. However, loan disbursement is only 48 trillion 62 billion rupees. Banks can invest up to 90 percent (CD ratio) of total loan deposits. However, now the CD ratio is only 83.47 percent (including debentures). According to that, banks have reached the stage of investing more than 3.5 billion. Banks, which were suffering from lack of liquidity until a few months ago, are now facing problems due to non-disbursement of loans. Mainly due to the financial crisis, the demand for loans in banks has not increased. As a result, liquidity in banks is increasing.

According to Rashtra Bank, the deposits of commercial banks have reached 49 trillion 57 billion rupees. Deposits in commercial banks increased by 6 billion rupees in one day. However, banks' lending is only 43 trillion 4 billion rupees. Although there was a demand for loans some time ago, the banks were unable to provide loans due to lack of liquidity. Now liquidity (investable capital) is increasing in banks. However, the demand for loans is very low.

Especially due to the recent economic crisis, there is no demand for loans. Now the demand for goods and services in the market has decreased. The purchasing power of consumers has also decreased. The real estate business is also not encouraging. Moreover, the interest rate of bank loans is also high. In this situation, it is not possible to take a loan from the bank at an expensive rate, to do business, to buy and sell real estate. That is why there is no demand for loans in banks.

Since there is no demand for loans, the credit deposit ratio (CD) ratio of banks is also continuously decreasing. The CD ratio, which was 88.07 percent last July, has now dropped to 83.47 percent. According to this data, banks seem to be in a comfortable situation in terms of providing loans. Banks can provide loans by maintaining a CD ratio of up to 90 percent. However, now the CD ratio of banks is less than 85 percent. This confirms that banks are in a comfortable position in terms of providing loans.

Interbank interest rate is  down by 3.42 percent

Internal transactions between banks, i.e. interest rates on inter-bank transactions, are also decreasing. As the liquidity in the banks becomes easier, the interest rate of inter-bank transactions is also decreasing.

According to the National Bank, the inter-bank interest rate has remained at 3.42 percent. Especially after the increase in liquidity in banks, the inter-bank interest rate has decreased. Due to lack of liquidity in banks, the interest rates of deposits and loans were also high. At that time, the interest rate of the money borrowed by the banks from each other, i.e. the inter-bank interest rate, also increased. This interest rate increased to 8.5 percent last year. However, in the last few years, this interest rate had reached 2 percent.