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Monday, November 29, 2021
    Nepal Breaking NewsBusinessAs a result of an increase in loan issuance, banks' deposits collection...

    As a result of an increase in loan issuance, banks’ deposits collection fell even further last month.

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    From October to November, commercial banks’ deposit collections decreased by Rs 36 billion while issuance by an equal amount during the one-month period from October to November.

    Bank deposits decreased from Rs 4.269 trillion to Rs 4.233 trillion over the same time, according to the Nepal Bankers’ Association (NBA). Similarly, the amount from Rs 3.998 trillion to Rs 4.034 trillion, representing a 4% increase value.

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    Currently, Nepal’s banking system is suffering from a severe shortage of loanable funds a result of an excessive amount of loans being and a poor rate of deposit collecting. According to the Nepal Rastra Bank, as a result of this, the credit-deposit ratio of the vast majority of banks has now exceeded the legally mandated maximum of 90 percent.

    While the banks have been considering raising their interest rates, the Nepal Rastra Bank has interfered immediately, stopping the institutions from making such a move. Analysts have sharply criticized the central bank’s decision, claiming that by fixing interest rates, the will cause Nepal’s banking sector to lose confidence the international financial market.

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