Deposits of Financial Institutions Drop by Rs. 55.7 Billion in August 2025: NRB Data Reveals

Nepal’s banking sector witnessed a notable contraction in deposits during August 2025, with total deposits across financial institutions falling by Rs. 55.79 billion, according to the latest Other Depository Corporation Survey published by Nepal Rastra Bank (NRB). The total deposit volume stood at Rs. 7.20 trillion, down 0.8% from the previous month, indicating tightened liquidity and reduced cash inflows in the formal banking system.

Breaking down the data, demand deposits—highly liquid accounts such as current accounts—declined sharply by Rs. 112.55 billion (21.8%), signaling lower transaction-based cash balances among businesses and individuals. Residential deposits, which account for a major share of the total, fell by Rs. 113.4 billion, showing households’ withdrawal of savings, possibly to meet rising consumption needs or investment in non-banking assets like gold and real estate.

However, the contraction was partially offset by a rise in savings and call deposits. Savings deposits increased by Rs. 32.27 billion (1.2%), suggesting that many depositors shifted funds from short-term demand accounts to longer-term savings to secure higher interest returns. Similarly, call deposits rose by Rs. 45.6 billion (8.8%), driven mainly by institutional depositors and large corporates.

Fixed deposits, traditionally the most stable source of funds, saw a mild decline of Rs. 21.36 billion (0.6%), reflecting cautious household sentiment and tighter cash conditions. On the other hand, margin deposits and non-residential accounts remained mostly stable.

Economists note that the fall in total deposits mirrors ongoing liquidity pressures and modest credit expansion in the banking system, as well as rising competition from alternative investment channels such as stock and bond markets. With the festival season approaching, liquidity management will be a key challenge for banks.