March 21: The Credit to Deposit(CD) ratio of banks and financial institutions(BFIs) has gone up. Continuous fall of deposits from the banking system has caused the CD ratio to surge. The average CD ratio of the banks and financial institutions reached 85.71 percent on March 18, according to Nepal Rastra Bank.
The CD ratio of the banks which stood at 85.60 per cent on March 14 increased to 85.69 percent on March 15.
As per the Nepal Rastra Bank directives, banks and financial institutions need to maintain CD ratio threshold below 90 percent.
Deposits are continuously falling from the banking system since last week. Deposits had fallen by Rs 11 billion on March 15 compared to March 14. Banks and financial institutions had deposit of Rs 5413 billion on March 14 while the deposits fell to Rs 5402 billion the next day.
While commercial banks had deposits of Rs 4764 billion on March 17, the deposits fell by one billion on March 18. The total deposits of commercial banks was Rs 4761 billion on March 15. Development banks and finance companies had a total deposits of Rs 641 billion on March 18.
Similarly, total lending of the banks and finance companies was Rs 4813 billion on March 18. Total lending of Rs 4817 billion as of March 14 had dropped to Rs 4812 billion on March 15. The total loan disbursement reached Rs 4813 billion on March 17.
The interbank interest rate dropped from 7.1 per cent to 7 percent from March 17 to march 18, according to Nepal Rastra Bank.