KATHMANDU: From mid-February to mid-March, the majority of Nepal's commercial banks have maintained their interest rates at their current levels. With only one bank raising rates and another lowering them, 18 of the 20 banks kept their rates from the previous month. Although Laxmi Sunrise Bank and Global IME Bank reduced their rates by 0.25 percentage points, the average interest rate on individual term deposits is still about 6.001 percent.  

The demand for loans has remained low even though the banking industry has a lot of liquidity. While total credit investment is Rs 5.428 trillion, bank deposits have reached Rs 6.722 trillion. At 79.44 percent, the credit-to-deposit (CD) ratio has stabilized, much below the central bank's 90 percent threshold.  

With excess funds circulating in the market, Nepal Rastra Bank (NRB) has been employing various financial tools to absorb liquidity and maintain stable interest rates. However, even under these favorable conditions, the expected rise in loan investments has not materialized.  

Bank lending has still increased when compared to the same period last year. The total loan amount has risen by Rs 351.31 billion from Rs 5.083 trillion in the previous fiscal year to Rs 5.433 trillion currently. In the past six months alone, credit expanded by Rs 267 billion, reflecting a 5.2 percent increase, which is higher than the 4.2 percent growth (Rs 204 billion) recorded during the same period last year.  

Although lending has grown overall, certain sectors have experienced a downturn. According to data from the central bank, loans such as term loans, overdrafts, working capital loans, and hire purchase loans for businesses have slightly declined compared to the first half of the previous fiscal year.  

On the other hand, loans backed by share collateral saw an increase of Rs 29 billion, while real estate lending rose by Rs 28 billion. In the last six months, share-based loans expanded by Rs 23 billion, and real estate credit grew by Rs 5 billion.  

Meanwhile, key industries have benefited from credit growth. Loans provided under term loans to the industrial sector surged by Rs 116 billion, lending to the service sector increased by Rs 61 billion, and import financing climbed by Rs 51.87 billion.