Bank deposits up by Rs 40 Billion

Deposits of commercial banks surged by around Rs 40 billion in the last one month, due to improvement in government spending. Deposits of banks stood at around Rs 973 billion as of June 28, up from Rs 933 billion recorded on May 31, as government agencies started yielding to year-end pressure of boosting spending. “Since the government is major spender in the country, their spending pattern tends to affect the level of deposits at banks and financial institutions,” Rajan Singh Bhandari, CEO of Citizens Bank and president of Nepal Bankers´ Association, told Republica. Although current figure on government spending is not available, data of May 29 shows that total government spending till that date stood at Rs 218.05 billion, which was only 53.86 percent of the total spending target of Rs 404.82 billion set for the year. Of this, Rs 174.79 billion was spent to cover recurrent expenses, while Rs 25.04 billion was used as capital expenses. “We believe the government spending has gone up significantly since then, which raised deposits at commercial banks,” Janma Jay Regmi, spokesperson of the Ministry of Finance, said.