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By Sandeep Chaudhary

Private Sector Credit Grows 1.6% While Fixed Deposits Decline Slightly – NRB Banking Data FY 2025/26

Private Sector Credit Grows 1.6% While Fixed Deposits Decline Slightly – NRB Banking Data FY 2025/26

According to the Nepal Rastra Bank’s (NRB) Mid-September 2025 “Other Depository Corporation Survey”, private sector credit expanded moderately by 1.6%, reaching Rs 5.70 trillion, compared to Rs 5.62 trillion in mid-July 2025. This growth, although slower than in previous years, highlights a cautious credit environment as banks maintained conservative lending practices amid tight liquidity and subdued investment demand.

Within the total, loans to non-financial private corporations grew by 0.9%, while credit to households rose slightly by 0.9% as well. This steady increase suggests stable but limited momentum in private investment and consumer borrowing, reflecting the current phase of economic recovery and controlled credit expansion policies under NRB’s prudential regulations.

On the deposit side, fixed deposits declined slightly by 0.5% to Rs 3.49 trillion, compared to Rs 3.51 trillion in mid-July 2025. The reduction indicates that depositors are shifting toward more liquid instruments such as savings and call deposits, influenced by interest rate adjustments and flexible liquidity conditions. Meanwhile, savings deposits rose by 3.7% to Rs 2.77 trillion, underscoring stable household savings behavior and remittance-driven inflows.

The overall banking sector assets grew by 1.9%, reflecting modest credit expansion and increasing general reserves. The rise in reserves by 12% to Rs 691 billion signals banks’ efforts to strengthen capital buffers in compliance with regulatory standards and to cushion against potential macroeconomic risks.

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