Kathmandu [Nepal], August 30 – Deposits at Nepal’s banks and financial institutions grew significantly faster than private-sector credit in fiscal year 2025-26 pointing to a buildup of liquidity as demand for loans remained relatively weak.
According to the latest data from Nepal Rastra Bank (NRB), deposits increased by 13.9 percent or Rs 1,013.05 billion to Rs 8,276.93 billion by mid-July 2026. Deposit growth had stood at 12.6 percent in the previous fiscal year.
Meanwhile, private-sector credit grew by only 6.5 percent or Rs 359.36 billion to Rs 5,857.06 billion compared with 8.4 per cent growth a year earlier.
The widening gap indicates that banks mobilised deposits much faster than they expanded lending to businesses and households. Additional deposits rose by more than Rs 200 billion from the previous year while additional private-sector credit fell by more than Rs 64 billion.
The structure of deposits also shifted significantly. Saving deposits accounted for 47 percent of total deposits in mid-July 2026 up from 36.8 percent a year earlier while fixed deposits fell to 35.3 percent from 48.3 percent.
Credit growth remained uneven across sectors. Lending to construction increased 18.6 percent, followed by consumable goods at 17.8 percent and transportation, communication and public services at 15 percent. However, credit to agriculture declined 1.8 percent.
The increased liquidity has also contributed to lower interest rates. The average lending rate of commercial banks fell to 6.55 percent in mid-July 2026 from 7.85 percent a year earlier.
NRB absorbed Rs 42,516.25 billion through various monetary instruments during the fiscal year, while injecting Rs 1,172.14 billion through net purchases of US dollars from the foreign exchange market.
