KATHMANDU: The Gen-Z protests on September 8 and 9 have had a noticeable impact on Nepal’s banking sector, with sluggish credit demand widening the gap between deposits and loans.
According to the Nepal Rastra Bank (NRB) data up to Kartik, commercial banks in Nepal had collected Rs 7.44 trillion in deposits, while only Rs 5.625 trillion was disbursed as loans during the same period.
The lack of growth in loan demand prompted many banks to lower interest rates on personal term deposits for the month of Kartik. Out of the commercial banks operating in the country, 14 banks reduced rates for personal term deposits compared to Aswin.
Similarly, 10 banks lowered interest rates on institutional term deposits. Overall, rates fell by 0.263% for personal deposits and 0.2205% for institutional deposits.
Banks that cut personal deposit rates include Machhapuchhre, NMB, Nabil, Prime, Prabhu, Citizens, Laxmi Sunrise, Everest, NIMB, NIC Asia, Standard Chartered, Nepal SBI, Agricultural Development, and Sanima Bank.
On the other hand, Nepal Bank, Siddhartha, Rastriya Banijya, Kumari, Global IME, and Himalayan Bank maintained their rates for Kartik. Among personal deposits, Global IME and Himalayan Bank offered the highest rate at 6%, while Nabil, Prabhu, and Agricultural Development Bank provided the lowest at 4.95%.
For institutional deposits, Machhapuchhre, NMB, Nabil, Prabhu, Everest, NIC Asia, Nepal SBI, Agricultural Development, Sanima, and Himalayan Bank reduced rates, while other banks kept them unchanged. The highest institutional deposit rate for Kartik is 4.5% offered by Himalayan and NIC Asia Bank, while the lowest is 2.75% provided by Prime, Prabhu, Standard Chartered, and Agricultural Development Bank.
The rate adjustments reflect banks’ efforts to balance liquidity amid reduced lending demand following the recent protests.
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