Banking Collect 91 Billion In Deposits During Lockdown
May 11, 2020 | Investopaper
About Rs 91 billion has been collected in banks and financial institutions during the lockdown period of the government to avoid the risk of Covid-19. The deposit collection in banks and financial institutions is from Chaitra 11 to Baisakh 27. Due to the lockdown, most banks and financial institutions were closed till last Friday. Although some branches were open for two three hours daily, there was no transaction other than limited banking such as deposit collection, withdrawal and general banking.
According to the NRB, the deposits of banks and financial institutions have increased from Rs. 3.59 trillion in Chaitra 11 to Rs. 3.68 trillion in Baisakh 27, 2077. Economic activities were closed during the lockdown period. Essential activities including food, drinking water and medicine were also carried out in lockdown.
NRB spokesperson Gunakar Bhatta said that huge deposits were collected from these sectors in the banking and financial sector during the period. “The business of buying and selling food, medicine and pharmaceutical tools has made a good income,” he said. Chairman of the Bankers’ Association Bhuwan Dahal said that the deposits may have increased significantly as banks and financial institutions transferred the interest on the deposits to the account in end of Chaitra. ‘Interest was calculated quarterly in Chaitra, some money came through remittances. This increased the deposits, ‘he said.
Despite the increase in deposits during the lockdown period, the credit flow of banks and financial institutions has not increased much. According to the NRB, the credit flow of banks and financial institutions increased by only Rs 26 billion in the same period. The total lending has increased to Rs 3.24 trillion at Baisakh 27 from Rs 3.22 trillion in Chaitra 11. NRB has stated that there was no flow of credit during this period as all the works were stopped except the urgent ones.
With the start of the new year, the new credit flow of banks and financial institutions seems to be stable. Banks and financial institutions say that the flow of new loans has been stopped due to non-receipt of demand from the borrowers due to the lockdown. NRB has stated that there is excess liquidity of Rs 38 billion in the banking and financial system even though there is no credit flow.
The government has collected Rs 125 billion in internal debt during the lockdown period. Of this, Rs 55 billion was raised in the last week of Chaitra alone. This year, the government has set a target of raising Rs 195 billion in internal debt. Although the government has revised the revenue target in the half-yearly review of the budget, it has kept the internal debt receivable unchanged.
NRB plans to raise Rs 194 billion from other instruments if Rs 1 billion is collected from foreign savings certificates. Out of which, the sale of foreign employment savings certificates is being opened in all quarters from this year. NRB has opened sale of savings certificates throughout the year as per the directive of the Ministry of Finance with the objective of including many who have gone for foreign employment.
