Kathmandu, July 14: Nepal’s banking sector continues to show strong performance in key financial indicators, with notable progress in digital banking, credit distribution, and capital adequacy, according to data released by Nepal Rastra Bank (NRB) for the period ending mid-June 2025.
The total deposit-to-GDP ratio stood at an impressive 114.69%, driven primarily by Class “A” commercial banks, which alone recorded a 102.56% ratio. The total credit-to-GDP ratio reached 91.15%, indicating robust lending across all banking classes.
Credit and deposit performance
The overall credit-to-deposit ratio for the banking system was 79.48%, reflecting a balanced liquidity position. Class “B” institutions had the highest ratio at 84.80%, while Class “C” microfinance banks remained more conservative at 80.15%. Fixed deposits accounted for 49.98% of total deposits, and savings deposits represented 36.06%.
Non-performing loan (NPL) ratios were manageable, with the overall system recording an NPL of 5.24%, though Class “C” institutions showed a higher figure of 13.04%, indicating rising credit risks in the microfinance sector.
Liquidity remains strong
The banking sector maintained a solid liquidity position. Total liquid assets to total deposits ratio stood at 24.74%, comfortably above regulatory thresholds. Cash and bank balance to deposit ratios varied by class, with Class “A” banks maintaining 7.59%.
Likewise, the core capital to risk-weighted assets (RWA) ratio across the system was 9.58%, and the total capital to RWA was 12.40%, both well above the minimum capital requirements set by Nepal Rastra Bank (NRB).
Digital banking gains momentum
Digital banking adoption is rising rapidly, with over 2.66 million internet banking users and 27.46 million mobile banking users recorded across the country. Class “A” banks led the digital transformation, hosting over 23.3 million mobile banking customers.
There are now 5,265 ATMs nationwide, and the use of electronic payment instruments also surged, with more than 13.5 million debit cards, 314,453 credit cards and 246,440 prepaid cards in circulation. The banking institutions so far have managed 1.966 million loan accounts, 59.4 million deposit accounts and 54 financial institutions across the country.
The weighted average interest rate on deposits was 4.29%, while lending rates averaged 7.99%. Among deposit types, fixed deposits offered the highest return at 5.92%, compared to 3.38% on savings and 1.12% on call deposits. #nepal #NRB #banking
