April 23: The lending of commercial banks has increased by 25.63 percent in the last eight months of the current fiscal year compared to the corresponding period of the last fiscal year. Though the COVID-19 has extremely affected the country’s economy as a whole, the business of banking institutions remains an exception.

In the review period, 27 commercial banks have disbursed additional loans of Rs729 billion. With the increase in the lending, a total of Rs 3,573 billion loans have been disbursed until the month of April by the commercial banks. In the review period of the last fiscal year, banks had given loan of Rs 2,844 billion.

Commercial banks were operating partially for three months since the lockdown was imposed on March 24 last year. Yet, the business of commercial banks has been satisfactory.

Lately, rise of COVID-19 cases and approaching second wave of the virus has presented challenges to the expansion of the business, says Bhuwan Kumar Dahal, president of Nepal Bankers’ Association. He expressed concern that most of the businesses might get affected again.

Mahesh Sharma Dhakal, Deputy CEO of Global IME Bank, said apart from the tourism industry, loans have been disbursed in other sectors and therefore the situation is not so discouraging so far.

Lending of the banking institutions has gradually improved. NIC Asia has the highest total lending among the banks. NIC Asia Bank had announced various schemes from the beginning of the current fiscal year to attract borrowers. The bank has increased loans to the borrowers by 48.48 percent in the current fiscal year. With the increase in lending, the total lending of the bank has reached Rs 259 billion. Until the corresponding period of the last fiscal year, it had extended loan of Rs 175 billion.

Mega Bank is second in the list of banks to have increased the lending in the review period of the current fiscal year. Mega Bank has increased its lending by 69.86 percent in the review period and disbursed credit amount of Rs 138 billion.

Kumari Bank has succeeded to disburse loan of Rs 43.2 billion and its total lending amount has reached to Rs 134 billion. Similarly, Nabil Bank has extended its lending by 27.88 percent and disbursed total loan of Rs 193 billion.

During the COVID-19 pandemic, Prabhu Bank, Citizens International Bank, Global IME Bank have extended an additional loan of Rs 40.86 billion, Rs 37.93 billion and Rs 34.39 billion respectively.

Global IME Bank has increased its total loan facility by 17.10 percent to Rs 235 billion. During the COVID-19 pandemic it had provided Rs 201 billion loan in the corresponding period of the last fiscal year.

Dhakal, Deputy CEO of the Global IME  Bank, said the bank has not been able to increase the loan as expected in one year but it is satisfactory. He said that the bank still has sufficient capital for investment.

“If there were enough economic activities, it would require investment in infrastructure and demand for raw materials would increase accordingly. The rise in economic activities would give a boost to lending however, the lending flow is still satisfactory,” Dhakal said.