Bank Deposits Hit All-Time High, But Credit Growth Remains Sluggish

Nepal's banking system has witnessed a record surge in deposits, but loan disbursement has failed to keep pace, indicating a slowdown in credit demand across the economy.

According to the latest data released by Nepal Rastra Bank, total deposits collected by commercial banks, development banks, and finance companies have reached NPR 6.91 trillion. This marks the highest deposit figure ever recorded in the country’s financial sector.

Despite this surge in liquidity, total credit investment stands at just NPR 5.537 trillion. In simple terms, while deposits have grown significantly, banks are struggling to channel those funds into loans.

A closer look shows that commercial banks alone hold NPR 6.175 trillion in deposits, while other financial institutions account for the remaining NPR 735 billion. On the lending side, commercial banks have disbursed NPR 4.919 trillion, and the rest has come from other institutions.

Currently, the credit-to-deposit (CD) ratio sits at 78.97%, well below the regulatory threshold of 90%. This means banks still have around NPR 683 billion in investable funds that are yet to be deployed.

The data paints a clear picture — despite having ample liquidity, banks are finding limited opportunities or demand for lending. This reflects a broader concern about slowed investment momentum and economic activity.