How Safe Are Deposits? Understanding SLR & Net Liquidity Ratios

Under Nepal Rastra Bank’s mid-July 2025 data, the analysis of Statutory Liquidity Ratio (SLR) and Net Liquidity Ratios provides a clear picture of how safe deposits are across the commercial banking sector. On average, commercial banks maintained an SLR of 30.13% and a Net Liquidity Ratio of 35.07%, both of which are comfortably above regulatory minimums. This indicates that the sector, in aggregate, holds sufficient liquid assets such as government securities and readily available funds to withstand potential liquidity stress or sudden withdrawals.

Looking deeper, state-owned banks are leading in depositor protection. Rastriya Banijya Bank (RBB) reported a strong Net Liquidity of 44.24% and SLR of 40.33%, showing its conservative approach in safeguarding public funds. Similarly, Nepal Bank Limited and Agriculture Development Bank (ADBL) posted SLR figures of 35.40% and 38.95%respectively, alongside healthy net liquidity levels above 37%. These results confirm that government-backed banks are maintaining robust buffers, reassuring depositors of stability.

In the private banking space, the performance is more mixed. Standard Chartered Bank Nepal stands out with the highest Net Liquidity Ratio at 46.33%, paired with an SLR of 35.29%, reflecting its global standards in risk management. Among large domestic players, Global IME Bank (Net Liquidity 37.75%, SLR 31.17%) and NIC Asia(Net Liquidity 36.19%, SLR 33.05%) show healthy cushions, balancing rapid loan growth with prudent liquidity management. Kumari Bank and Laxmi Sunrise Bank also maintain stability with ratios above 30%, signaling solid liquidity positioning.

However, not all banks are equally fortified. Nabil Bank, despite its size and profitability, showed a relatively thinner buffer with Net Liquidity at 27.31% and SLR at 25.10%, indicating a stronger tilt toward aggressive lending strategies. Similarly, Citizens Bank International (Net Liquidity 28.06%) and NMB Bank (27.39%) sit at the lower end of the liquidity spectrum. While still compliant with NRB regulations, these banks operate with narrower cushions, leaving them more exposed during sudden deposit outflows or systemic shocks.

In conclusion, deposit safety across Nepal’s commercial banks remains strong overall, with both liquidity ratios averaging comfortably above regulatory thresholds. Government-owned banks and select private banks like Standard Chartered, Global IME, and NIC Asia provide the strongest deposit protection. On the other hand, banks with thinner liquidity positions—such as Nabil, Citizens, and NMB—signal higher risk during stress scenarios. For depositors, this means confidence in the system is justified, but individual bank liquidity management should still influence trust and decision-making.