Deposits Surge Ahead of Dashain, Investable Funds Cross Rs. 1 Trillion

Kathmandu — With Dashain and other major festivals approaching, deposits in banks and financial institutions have surged to record highs. According to the latest data from Nepal Rastra Bank (NRB), total deposits reached Rs. 7.371 trillion as of Ashoj 5. Commercial banks hold Rs. 6.621 trillion, while other financial institutions account for Rs. 751 billion.

During this period, the banking system has disbursed Rs. 5.629 trillion in loans — Rs. 5.006 trillion by commercial banks and Rs. 624 billion by other financial institutions. However, loan expansion has lagged behind deposit growth, pulling the Credit-to-Deposit (CD) ratio down to 75.42%. This has left around Rs. 1.04 trillion in surplus liquidity sitting idle in the financial system.

Santosh Koirala, President of Nepal Bankers’ Association and CEO of Machhapuchchhre Bank, noted that remittance inflows typically rise by up to 50% during festivals like Dashain, Tihar, and Chhath, boosting deposits significantly. But with weak loan demand, investable funds have continued to accumulate in the banking system.

The recent Gen Z protests caused billions in damages to public and private properties, and attention is now turning to how surplus liquidity can be used for economic recovery.

NRB Executive Director Dr. Ramsharan Kharel said measures are being prepared to support affected businesses through loan restructuring, refinancing, concessional lending, and reduced interest rates. He highlighted that Rs. 800 billion is immediately available for deployment in reconstruction and recovery projects, with interest rates currently at relatively low levels.

Business groups including FNCCI President Chandra Prasad Dhakal, CNI President Virendra Raj Pandey, and Nepal Chamber of Commerce Senior Vice-President Deepak Malhotra have urged the government to provide tax relief, refinancing facilities, and investment incentives to revive private sector confidence.

According to the Insurance Board, claims worth Rs. 23 billion have already been filed, while preliminary FNCCI data estimates private sector losses at over Rs. 80 billion due to the Gen Z protests.

Economists caution that while liquidity and low interest rates provide an opportunity to revive the economy, failure to mobilize these funds effectively could jeopardize the government’s 6% economic growth target for this fiscal year.