Kathmandu. After the accumulation of more liquidity in the banking system, the inter-bank interest rate has fallen to the line of 1 percent. Now the banks have accumulated a huge amount of money for loan investment. With the increase in the amount of investable funds in the banking system, the inter-bank interest rate is also continuously decreasing. Currently, this interest rate has reached 1.14 percent. This interest rate will decrease only after the liquidity in the banks becomes easier.

At present, banks are investing more than 5 billion in loans. However, without the demand for loans, the equivalent amount has been accumulated in the banks. It is said that this situation has occurred when deposits are increasing but loan disbursement is slow.

At present, the total deposit collection of banks and financial institutions has reached 59 trillion 60 billion rupees. Commercial banks alone have reached 52 trillion 68 billion rupees. However, loan investment is almost the same. According to the statistics of the National Bank, until the 16th of November, banks and financial institutions have invested a total of 49 trillion 78 billion rupees in loans. Commercial banks have 4 trillion 5 billion. Credit investment is slower than deposits.

Demand for loans is low as deposits continue to increase. Which has also reduced the loan-deposit ratio (CD ratio) of banks and financial institutions. Currently, the CD ratio has dropped to 80.76 percent. Banks and financial institutions can provide loans with a maximum CD ratio of 90 percent.

Bankers say that the credit flow could not increase without the economy running. Banks have also reduced interest rates recently. However, despite the decrease in interest rates, the demand for loans is still slow, bankers say. They argue that even though economic activity has not increased, credit has not been expanded. It is said that there is no demand for loans due to economic laxity.

In order to keep the economy running, the central bank has also adopted some policy flexibility. In recent times, it has also relaxed the policy related to home loan, share loan, hire purchase loan. Banks have also introduced various schemes. However, economic activity is not increasing. Loan disbursement is slowing down.