CD Ratio Trends in Nepali Banking Sector – Asadh 2082

The Credit-to-Deposit (CD) ratio is a vital indicator of how aggressively banks are lending compared to their deposits. A higher ratio shows that banks are pushing loans actively, but it also raises liquidity risks if deposits shrink. According to the mid-July 2025 NRB data, the sector average CD ratio stands at 76.63%, reflecting a balanced but somewhat aggressive lending posture overall.

Among individual banks, Citizens Bank International (84.45%), NMB Bank (84.31%), and Prime Commercial Bank (83.37%) top the list with the highest CD ratios. These banks are operating at the edge of their liquidity buffers, indicating aggressive loan expansion relative to deposits. While such strategies can boost profitability, they also expose the banks to higher liquidity risks if deposit growth slows down.

On the other side, Rastriya Banijya Bank (62.27%) maintains the lowest CD ratio, followed by Nepal Bank Limited (71.10%) and Agriculture Development Bank (72.82%), highlighting the conservative stance of state-owned banks in lending. This demonstrates their strong liquidity buffer and ability to handle sudden shocks, though it may limit profitability compared to private peers.

Most large private banks fall between 75%–82%, such as Nabil Bank (82.48%), Himalayan Bank (81.34%), and Sanima Bank (81.03%), reflecting a competitive but cautious balance.