October 30: The share of fixed deposits of banks has climbed to almost 60 percent of the total deposits. The amount in fixed deposit accounts has increased due to the long-term schemes launched by banks to attract more deposits amid liquidity crisis.

As per the data of Nepal Rastra Bank, the total deposits of commercial banks has reached Rs 5090.42 billion as of mid-September this  year.

The share of fixed deposits stands at 58.8 percent, which was 49.2 percent a year ago.

Commercial banks have announced interest of 12.13 percent for fixed deposits, 10.13 for institutional term deposits and 13.13 percent for remittance since mid-September. Similarly, development banks have announced 13 percent interest for fixed deposits and 11 percent interest for institutional term deposits while finance companies have fixed interest rate of 13.47 for personal term deposits and 11.47 for institutional term deposits.

Bank deposits have been declining due to liquidity crisis. The deposit collection of banks and financial institutes declined by 0.9 percent in the month of Bhadra (mid-August to mid-September) when credit flow increased by 0.55 percent.

Banks have announced schemes to attract deposits by promising to pay ten times the initial deposit in 21 years. Besides interest, banks are also providing other facilities such as insurance, credit card, easy loans to such depositors. As a result, the share of fixed deposits has been increasing at the expense of other types of deposits.

The share of current account has dropped to 7.7 percent in mid-September from 7.9 percent during the corresponding period of last year. Likewise, the share of general savings account has dropped to 26.5 percent in mid-September from 35 percent.