NRB Assets Top Rs 4 Trillion Amid Bank Liquidity Glut

Nepal Rastra Bank's total balance sheet surpassed Rs 4.04 trillion by mid-September, bolstered by rising foreign exchange holdings despite sluggish domestic credit demand. Preliminary figures reported by Aarthik News indicate central bank assets grew by Rs 169.91 billion across the opening two months of the fiscal year, with foreign currency assets representing nearly 96 percent of the aggregate. These external holdings include Rs 2.743 trillion in foreign securities and roughly Rs 639.75 billion in overseas bank deposits.

The central bank's expanding balance sheet comes alongside persistent surplus liquidity across the financial sector. According to Annapurna Post, commercial lenders hold approximately Rs 1.36 trillion in excess liquidity and more than Rs 1 trillion in deployable funds, yet private borrowing remains depressed despite lending rates falling to 4 to 5 percent. NRB has intervened to absorb this overhang, including an Rs 18 billion mop-up on October 2 following earlier absorptions exceeding Rs 400 billion.

Concurrently, central bank administrators at the distressed Karnali Development Bank are restructuring its capital. Onlinekhabar reported that the management team plans to offer founder shares to depositors after slashing earlier founders' equity to 1 percent.