KATHMANDU: The banks and financial institutions that had been experiencing the alarming decrease in the deposits have witnessed a relief with the increase of deposits after the May 13 local level election.

In the two weeks since the election, Rs 13 billion has been added to commercial banks.

According to the Nepal Bankers’ Association, deposits in commercial banks stood at Rs. 4370 billion prior to May 13 election.

Deposits had risen by Rs 7 billion in the first week after the election.  The trend of making expenses in the last few weeks of the fiscal year has also played a significant role in the deposit hike.

Similarly, the credit of banks has also increased modestly. According to the association, an additional Rs 7 billion was disbursed in the second and third weeks of May. Out of the total loan disbursement of Rs. 4191 billion till May 13, it has reached Rs. 4198 billion by May 27.

Despite the general improvement in deposits, banks are not in a position to disburse more loans.

Even now, the CD ratio of deposits of more than a dozen banks is above 90 percent. Those banks are obliged to reduce the CD ratio to 90 percent by mid-July. This indicates that the bank will not be able to disburse the loan as long as the ratio is above 90.