KATHMANDU, NOVEMBER 23
There has been excess liquidity in the banking sector in the country for the past several months due to the decline in demand for loans. Liquidity in banks started to increase since the government imposed the nationwide lockdown in March. In fact, the amount of excess liquidity had reached as high as around Rs 200 billion in mid-April to mid-June, as per Nepal Rastra Bank (NRB).
“However, with the gradual increase in imports, lending is gradually picking up since mid-September due to which the amount of excess liquidity in banks is slowly dropping,” said Gunkar Bhatta, spokesperson for NRB.
According to him, NRB has also mopped up funds worth Rs 21.8 billion from banks to manage the surplus liquidity.
However, there is still around Rs 170 billion surplus liquidity in banks at the moment.
“Although NRB draws surplus funds from