Bank deposit increased by 19 percent

Deposit mobilization of commercial banks increased by Rs.81.9 billion (19.4 per cent) amounting to Rs. 503.5 billion as in mid-May 2009. This had increased by Rs. 63.5 billion (19.0 per cent) in the corresponding period of the previous year.

Saving and fixed deposits increased by 19.8 per cent and 24.2 per cent respectively in the review period. Such deposits had increased by 16.2 per cent and 26.7 per cent respectively in the corresponding period of the previous year.

Besides deposit mobilization, commercial banks increased the resource mobilization through means of injection of capital. Commercial banks injected additional capital of Rs.7.4 billion in the review period compared to an additional capital injection of Rs.6.6 billion in the corresponding period of the previous year, according to the Nepal Rastra Bank report.

The share of total capital mobilized by the commercial banks to their total assets/liabilities stood at 5.79 per cent as in mid-May 2009 compared to such ratio of 4.92 per cent as in mid-May 2008.

The review period witnessed marginally a lower growth of private sector credit from commercial banks compared to that of the previous year.

In the review period, credit to the private sector expanded by 24.2 per cent compared to a growth of 24.9 per cent in the corresponding period of the previous year.

Of the credit disbursed to the private sector, the growth of credit to production, construction, metal production, machinery and electrical tools, transportation, communication and public services, wholesale and retail business and service sectors remained lower in the review period compared to that of the previous year.

The liquid funds of commercial banks grew by 41.7 per cent in the review period compared to a growth of 12.8 per cent in the previous year. An elevated inflow of remittances contributed to an increase of commercial banks’ balance held abroad and thus, an increase of liquid funds of commercial banks.

In the first ten months of 2008/09, the NRB mopped up net liquidity of Rs. 11.7 billion through open market operations. Of the total liquidity of Rs.20.7 billion mopped up in the review period, Rs. 7.5 billion was mopped up from outright sale auctions and Rs.13.3 billion from reverse repo auctions.

Likewise, the NRB injected net liquidity of Rs. 121.5 billion by net purchase of 1.6 billion US dollar from commercial banks through foreign exchange intervention.

A net liquidity of Rs. 76.6 billion had been injected through a net purchase of 1.2 billion US dollar from commercial banks in the corresponding period of the previous year.

The NRB purchased Indian currency (IC) of 59.9 billion through the sale of 1.3 billion US dollar in the review period. Indian currency of 48.3 billion had been purchased through the sale of 1.2 billion US dollar in the corresponding period a year ago.

A depreciation of Nepalese currency vis-à-vis the US dollar encouraged the import from India against the payment of Indian currency and, therefore, a higher amount of IC purchase was made as against a sale of the US dollar in the review period.
Source: Gorkhapatra