Rumors of a lack of liquidity abound, with the bank's CEO saying, "It's not like we're going to be able to take deposits at 12/13 percent like before."

There are widespread rumors in the market that there is a lack of liquidity in banks and interest rates on loans are rising. The stock market is also expected to decline as interest rates on loans rise.

However, the bank's chief executive officer (CEO) has been saying that there will be no immediate lack of liquidity and interest rates will not rise sharply.

At present, the banking system has an investment capital of around Rs 71 billion. As that amount will reach by Baishakh and the government will start spending heavily after May, there is no possibility of lack of investment within this fiscal year.

Chairman of the Nepal Bankers' Association Bhuvan Dahal said that there was no possibility of immediate investment. "The current amount in the banking system is about two months," said Sanima, who is also the bank's chief executive officer.

Banks and financial institutions have not disbursed loans as there is no money to invest even though the number of people taking loans from banks has increased as the impact of corona virus infection is decreasing. As in the past, not only Rs 200 crore is invested in the banking system, but there is no money to invest, said Dahal.

Some banks have already started raising interest rates as there is a possibility of lack of liquidity. It is no longer possible to get a loan at an interest rate like when the amount to be invested is scattered. However, the bank's CEOs say that the interest rate on loans is not as high as the amount invested.

"As liquidity tightens, interest rates will rise slightly, but deposits will not be as high as 12-13 per cent as before," said a bank CEO.

Experts say that if the current investment climate is conducive, there will be a lack of investment after next September.

If the government does not change the way it spends, there will be a lack of re-investment from September, said Govinda Gurung, chief executive officer of Civil Bank.

"If the government changes the way the budget is spent, there will be no shortage of liquidity," he said. "If the development budget is spent proportionately from September, there will be no shortage of money to invest."

In the current fiscal year, the government had allocated Rs 353 billion for development expenditure. As of this fiscal year, only 14.4 percent of the total development budget has been spent till December.

Most of the total budget is spent in June. The amount spent will be enough to invest two months for banks and financial institutions.

Adding all the expenses incurred by the government, Rs 150 billion to Rs 200 billion will come to the market in June. If these expenditures were to be spent proportionately, there would be no 'drought' in the banking system due to lack of so much money.

Economists say the government's spending style is outdated and needs to be broken. If we don't change the traditional way of spending, the CEOs of the bank have projected that after September, there will be a real lack of liquidity like 2/3 years ago. But before that, he said, there was no prospect of a liquidity crunch.

The trend of borrowing from banks has increased

Businesses that have been confined to their homes for fear of transmitting the corona virus are now taking loans from banks, saying they have to do something.

With the introduction of the corona virus vaccine, entrepreneurs have been increasingly borrowing from banks and financial institutions.

Industries are also 70 percent open after the corona virus. Narayan Prasad Pokhrel, co-spokesperson of Nepal Rastra Bank, said that liquidity was declining as the demand for loans increased.

"Investments in banks are dwindling now," he said.

In one week, from March 22 to March 29, 27 commercial banks have increased their loan investments by Rs 27 billion.

Banks have collected Rs 3.89 trillion in deposits and invested Rs 3.362 trillion in loans as of March 30.