Private Sector Credit Expands 7.4% Year-on-Year to Rs 5.7 Trillion – Lending Momentum Continues in FY 2025/26

Published on October 27, 2025

According to the latest Nepal Rastra Bank (NRB) Mid-September 2025 “Other Depository Corporation Survey (y-o-y)”, credit to the private sector expanded by 7.4% year-on-year, reaching Rs 5.70 trillion, compared to Rs 5.31 trillion in the same period of the previous fiscal year. This growth of Rs 392 billion indicates a gradual yet sustained recovery in lending momentum across Nepal’s banking system during FY 2025/26.

The increase in private sector credit was primarily driven by loans to non-financial private corporations, which rose by 5.7% to Rs 3.48 trillion, reflecting improving business sentiment and rising demand for working capital. Meanwhile, household credit surged by 11.5%, reaching Rs 2.06 trillion, supported by personal loans, home construction financing, and SME lending. This reflects a rebound in consumer confidence and the expansion of credit access facilitated by digital banking channels and improved liquidity management in commercial banks.

However, the pace of credit expansion remains moderate compared to earlier years, as the NRB continues to prioritize monetary stability, prudent lending standards, and inflation control. The central bank’s focus on channeling credit toward productive sectors such as agriculture, manufacturing, and tourism has contributed to balanced credit distribution while discouraging speculative or high-risk lending.

At the same time, interest-accrued loans declined by 4.4%, signaling improved repayment discipline and better loan performance in the system. The overall credit-to-deposit ratio remains healthy, indicating that liquidity is being effectively transformed into productive credit.

Other Liabilities of Banks Rise 11.5% to Rs 1.84 Trillion as Reserves and Debentures Expand Sharply

Nepal’s banking sector recorded an 11.5% rise in other liabilities, totaling Rs 1.84 trillion, driven by surging reserves and increased debenture issuance. The expansion reflects enhanced capital strength, stable funding diversification, and robust financial resilience across the banking industry.

Private Sector Credit Expands 7.4% Year-on-Year to Rs 5.7 Trillion – Lending Momentum Continues in FY 2025/26

Private sector credit grew by 7.4% year-on-year to Rs 5.7 trillion, reflecting a steady lending recovery across both business and household segments. The rise in corporate and consumer credit underscores renewed confidence in Nepal’s economy and the central bank’s balanced liquidity management approach.

Private Sector Credit Grows 1.6% While Fixed Deposits Decline Slightly – NRB Banking Data FY 2025/26

Private sector credit in Nepal increased by 1.6%, supported by corporate and household lending, while fixed deposits fell by 0.5% amid changing deposit preferences. This balance reflects a stable yet cautious financial environment, where liquidity management and capital strengthening remain central to NRB’s monetary framework.

Bank Deposits in Nepal Rise Marginally by 0.5% to Rs 7.29 Trillion – NRB Mid-September 2025 Report

Nepal’s total bank deposits reached Rs 7.29 trillion in mid-September 2025, growing slightly by 0.5%. Savings deposits remained strong, while demand deposits declined and fixed deposits eased. This pattern indicates a steady liquidity position, with growing household savings and cautious credit activity under NRB’s tighter monetary oversight.

Private Sector Credit Expands 7.4% Year-on-Year to Rs 5.7 Trillion – Lending Momentum Continues in FY 2025/26

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