43pc population has access to banking services

The country’s 43 percent population has access to banking services. This figure is based on the number of deposit accounts in commercial banks, development banks and finance companies compared to the population size. The figure may increase further if the deposit accounts with cooperatives, micro-finance and other financial intermediates are taken into account. The number of deposit accounts in A, B and C class banks and financial institutions (BFIs) stands at 11.40 million, according to the Nepal Rastra Bank (NRB). The number is 43 percent of the total population of 26.49 million as per Census 2012. In 2006, only 26 percent population had access to banking, according to a World Bank study. A total of 714,538 deposit accounts were added in the period between mid-January and mid-August in 2013. “With the people’s access to banking services increasing day by day, the number of deposit accounts too has increased. This is a normal growth figure,” said Bhaskar Mani Gnawali, spokesperson for the Nepal Rastra Bank (NRB). The proliferation of BFIs in the last few years also attracted people towards the formal banking channels. The number of branches of A, B and C class financial institutions has reached 2469 as of Mid-August. Also, the introduction of new technologies has enabled banks to reach far flung areas through branchless banking activities. The central bank has been encouraging BFIs to reach non-banked areas by issuing a directive which says banks can open their branch in the Kathmandu valley only after opening three branches outside. Commerz and Trust Bank Nepal CEO Anal Raj Bhattarai said the fact that 43 percent of the population has access to banking is encouraging, but more efforts have to be made to include nonbanked population. Despite increased deposits accounts, the number of loans has reached 849,000, which is 7.44 percent of the number of deposit accounts. In the first eight months of 2013, the number of loans grew by 48,510. Gnwali said the ratio of loans-to-deposit accounts is a bit lower than expected. “The growth in the number of loans was healthy until the first six months,” said Gnawali, adding the figure remained low from mid-June to mid-August as financial institutions started prioritising productive sector investment. Bhattarai underscored the need for developing banking culture among the people to make sure that they obtain loans from financial institutions. The figure may increase if accounts with co-ops, micro-finance and other financial intermediates are taken into account