By A Staff Reporter,Kathmandu, Jan. 12: Deposits mobilisation of Banks and Financial Institutions (BFIs) recorded a stronger growth than credit expansion during the first five months of the current fiscal year 2025/26, according to Nepal Rastra Bank (NRB).

The Macroeconomic and Financial Situation report released by the central bank shows that deposits at BFIs increased by 3.9 per cent, or Rs. 281.89 billion, reaching Rs. 7,545.77 billion by mid-December 2025. 

This growth is higher than the 2.7 per cent increase (Rs. 172.32 billion) recorded in the corresponding period of the previous fiscal year. On a year-on-year basis, total deposits expanded by 13.9 per cent in mid-December 2025.

The share of demand, saving and fixed deposits in total deposits stood at 6.4 per cent, 39.9 per cent and 44.6 per cent respectively in mid-December 2025. Such shares were 5.3 per cent, 33.6 per cent and 53.1 per cent respectively a year ago.

The share of institutional deposits in total deposit of BFIs stood at 35.3 per cent in mid-December 2025. Such a share was 35.8 per cent a year ago. In contrast, private sector credit growth remained sluggish.

The credit extended by BFIs to the private sector increased by only 1.9 per cent (Rs. 102.24 billion), reaching Rs. 5,599.95 billion during the review period. 

This is significantly lower than the 3.5 per cent rise (Rs. 178.29 billion) observed in the same period last year. On a year-on-year basis, private sector credit grew by 6.6 per cent in mid-December 2025.

The shares of private sector credit from the BFIs to non-financial corporations and households stood at 62.7 per cent and 37.3 per cent respectively in mid-December 2025. Such shares were 64.1 per cent and 35.9 per cent a year ago.

In the review period, private sector credit from commercial banks, development banks and finance companies increased by 2 per cent, 0.8 per cent and 1.2 per cent respectively.

Out of the total outstanding credit of the BFIs as of mid-December 2025, 14.9 per cent is against the collateral of current assets (such as agricultural and non-agricultural products) and 64.4 per cent against land and building. 

Such ratios were 13.5 per cent and 66.1 per cent respectively a year ago.

In the review period, outstanding loan of BFIs to construction sector increased by 5.2 per cent, consumable sector by 5.1 per cent, transportation, communication and public sector by 3.5 per cent, industrial production sector by 2.5 per cent, and service industry sector by 0.4 per cent.

However, the outstanding loans of BFIs to agriculture sector decreased by 2.2 per cent, and finance, insurance and fixed assets sector decreased by 2.2 per cent.

In the review period, hire purchase loan extended by BFIs increased by 6.1 per cent, margin nature loan by 5.7 per cent, real estate loan (including residential personal home loan) by 3.7 per cent, cash credit loan by 2.6 per cent, term loan by 1.2 per cent, demand and other working capital loan by 1 per cent and trust receipt (import) loan by 0.9 per cent. 

However, overdraft loan decreased by 5.4 per cent during the first five months of the current