Kathmandu. Investable funds have started accumulating in the latest banking system. Liquidity in banks is getting easier. At present, the total amount with banks and financial institutions has reached 59 billion rupees. In the last one day, deposits of 4 billion rupees were added to the banking system. According to Nepal Rastra Bank, as of November 18th, deposits in banks and financial institutions were 58 trillion 96 billion rupees. However, it increased by 4 billion to 59 billion in one day. About Rs 47 billion more money was withdrawn from the banking system for Dasain. However, that amount is slowly coming back. Deposits of commercial banks have also increased by 5 billion in one day and have reached 52 trillion 14 billion rupees.

According to the statistics of the National Bank, as of mid-October i.e. on the 30th, there were total deposits of 59 trillion 15 billion rupees in the banking system. However, after Dasain, i.e. till 9th of October last, there was a total of 58 trillion 68 billion rupees in deposits in the banking system. Statistics show that in the last few days, the outgoing deposits have started coming to the bank. A total of 32 billion deposits have returned to the banking system immediately after Dasain.

Despite the continuous increase in deposits in the banking system, credit investment is not expanding. According to the statistics after the end of October, credit flow has stopped, on the contrary, it seems to have decreased. On October 30th, banks and financial institutions invested a total of 50 billion in loans. However, by November 19, it has decreased by 23 billion to 47 trillion 77 billion rupees.

Since the beginning of the last financial year, there was widespread lack of liquidity in the banking sector. In Nepal's banking system, the liquidity and investable capital decreased and the interest rate also increased.

While the economy is gradually recovering due to the effects of Covid-19, the effects of the Russia-Ukraine war and the rapid increase in imports caused a decrease in liquidity and investable capital in the banking system, which also increased interest rates. However, in recent times, it has gradually become easier. A huge amount of money has been accumulated in the banks for giving loans. At present, the banks and financial institutions have about 5 billion investable funds. This is based on the current credit to deposit ratio (CD ratio) in banks and financial institutions. Based on that, a total of 4 trillion 85 billion rupees of investable money has been accumulated in the banking system. Currently the CD ratio is 81.53 percent. Based on this, banks and financial institutions are currently in a very comfortable situation for credit investment. Banks and financial institutions can provide loans with a maximum CD ratio of 90 percent.

On the other hand, as the liquidity in the banking system is increasing, the inter-bank interest rate is also decreasing. Currently, this interest rate has dropped to 3.22 percent. Now liquidity (investable capital) is increasing in banks. However, the demand for loans is very low. It is also assumed that if the deposits in banks increase like this, the interest rate will decrease. In a program organized by Nepal Bankers Association on Monday, it was indicated that the interest rate will decrease. It was said that the interest rate will also decrease as the bank has started reducing the premium.

Due to the economic recession in the world market, the investment environment is also deteriorating. Bankers say that even though economic activity has not increased, loans have not been expanded. They say that even the crisis in the economy did not increase the demand for loans. Currently, the average interest rate of banks is 10.09 percent. However, bankers argue that this cannot be called a high interest rate. It is said that there is no demand for loans, especially due to economic laxity.