Bank deposits in Pokhara reach Rs 26b Loans portfolio satisfactory: NRB

Things are looking up for banks and financial banks in Kaski district: the collection of deposits by 89 banks and financial institutions in the district has grown by Rs 2 billion in the span of a year and reached about 26 billion. They have also managed to post a sound growth in loans and investment.

According to Nepal Rastra Bank (NRB), deposits at banks and financial institutions in the district had reached Rs 25.65 billion as of mid-April, 2009, when the first nine months of the current fiscal year ended. Their investments too reached Rs 23.81 billion during the period.

In the last fiscal year, the district had 69 banks and financial institutions, and they had mobilized deposits of Rs 23.45 billion and invested Rs 23.44 billion.

This fiscal year, 20 new banks and financial institutions have set up business in Pokhara. “This rise in the number of players and the immense competition among them mainly contributed to the sound expansion of deposits,” said Keshav Thapa, manager at NRB Pokhara.

The central bank has also tagged the lending situation as being satisfactory.

At present, 42 commercial banks, 23 development banks, 16 finance companies and 8 micro-credit companies licensed by NRB have their presence in the district. Such numbers have made Pokhara the city with the second-largest presence of banking institutions, after Kathmandu.

Central bank officials have said that so many banks and financial institutions have entered the district because they want to tap deposits potential of the community members who are working in or have retired from the British and Indian army. The community also offers a huge remittance business for the banks and financial institutions in the district.

The banks and financial institution have also chosen to set up shop in Pokhara because the city is very financially active city and because they want to strengthen their networks and financial bases, said a local banker. Apart from these institutions, more than 250 savings- and credit- cooperatives are doing business in Pokhara Municipality. And just as the banks are, they too are mobilizing substantial volumes of deposits.

Who is taking out all the loans, though? The banks and financial institutions have mostly given loans to business in the trade sector. NRB data shows that loans of Rs 4.65 billion have gone to wholesale and retail businesses. The construction and the transportation and communication sectors are the second and third highest investment-luring sectors. During the period, Rs 4.33 billion and Rs 2.97 billion loans have gone to those sectors, respectively.

The NRB report, however, does not give a clear picture about the investments that have gone into the tourism sector. And this even though Pokhara is one of the most famous tourist hotspots in the country.
Source: myrepublica.com