Credit picks up, but Nepal’s banks are awash with cash

Nepal's banking sector is experiencing an increase in credit demand while simultaneously holding excess liquidity, according to recent reports from Kathmandu. Financial institutions are awash with cash despite the uptick in lending activity.

According to industry bankers, the rise in credit demand is primarily driven by specific factors such as rising import costs, seasonal festive demand, and currency depreciation. They emphasize that this growth does not reflect a broad-based economic recovery.