The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
Private sector loans in Nepal rose 7.7% year-on-year to Rs. 5.6 trillion in mid-August 2025, driven by rising corporate and household borrowing amid improved liquidity and business confidence.
Nepal’s bank deposits grew 12.5% year-on-year to Rs. 7.2 trillion in August 2025, led by a sharp rise in savings and call deposits, while fixed deposits declined due to changing liquidity preferences.
Foreign liabilities of Nepal’s financial institutions rose by 4.5% to Rs. 34.7 billion in August 2025, reflecting renewed external borrowing to manage liquidity but also raising long-term currency risk concerns.
Loans and advances by Nepal’s financial institutions reached Rs. 7.06 trillion in mid-August 2025, growing only marginally as cautious lending and slow private investment kept credit expansion modest.
Call deposits rose 8.8 percent to Rs. 566 billion in mid-August 2025, driven by higher residential deposits and improved liquidity across banks and financial institutions.
General reserves of Nepal’s financial institutions surged by 11.9% in the past year, reaching Rs. 690.4 billion. The growth underscores capital strengthening and risk preparedness amid a cautious lending environment.
Financial institutions’ liquid funds declined by Rs. 33.3 billion (−4.4%) in August 2025, driven mainly by lower balances with NRB (−14.8%) and reduced cash in hand. Rising foreign placements partially offset domestic liquidity pressures.
Savings deposits rose slightly by Rs. 32.3 billion (1.2%) in mid-August 2025, reaching Rs. 2.70 trillion. Residential accounts continue to dominate, reflecting stable household saving behavior despite tightening liquidity and lower fixed deposit rates.
Private sector credit crossed Rs. 5.6 trillion in mid-August 2025, rising slightly by Rs. 12.5 billion. Corporate lending dominates, but growing interest accruals point to rising repayment stress in Nepal’s financial system.
Overall, the data indicates that Nepal’s banking sector is entering a phase of cautious consolidation — building stronger reserves while managing growing obligations — a sign of greater financial discipline but also of heightened systemic caution.