Banks go slow on offering loans

Rup Narayan Dhakal

Pokhara, May 16:

Commercial banks and finance institutes are issuing only half of their savings as loans in Pokhara. According to the Nepal Rastra Bank, Pokhara, these institutions had a deposit of Rs 12 million and Rs 148.1 million at the end of last fiscal year but they had invested only Rs 6.0 billion and Rs 611.826 million.

Dr Lekhnath Bhattarai, the associate professor of the Prithvi Narayan Campus, had conducted the study. The ongoing conflict and instability are being accused as behind this imbalance as businessmen and financial bodies don’t have any guarantee of good returns.

Out of the total amount of

loan issued, commercial banks have a share of 69.8 per cent, finance companies have 24.1 per cent while the development banks and cooperatives make up the remaining investment. The savings of commercial banks is worth Rs 10 billion and Rs 433.729 million, out of which current account holds 58.27 per cent of the deposits, fixed account has 18.68 per cent and others have 13.9 per cent.

Among commercial banks, Machhapuchhre Bank had issued most of the loans, amounting to about 45.38 per cent. Among financial companies, Annapurna Finance has the largest share of 40.43 per cent. Dr Bhattarai’s study shows that over 80 per cent of the loans is issued in commercial sector. Social sector has 9.6 per cent while, the service sector has 5.5 per cent, industrial sector has 1.2 per cent and agriculture sector has two per cent.