December 26: Inter-banking transaction has been declining in the current fiscal year in comparison to last year. In the first four months of FY 2017/2018, inter-banking transaction has reduced by Rs 79.23 billion compared to the corresponding period of last year.
Last year, the banks had done inter-banking transaction worth Rs 400.33 billion. According to NRB, the transaction has been Rs 321.10 billion in the first four months this year. Experts say that there is enough investible capital this year.
Along with the transaction, the interest rate for inter-banking transaction has also reduced in comparison to last FY. The interest rate was around 3.59 percent at this period of last FY whereas it is 2.68 per cent at present. During the review period last year, banks were lending from each other even at high interest rates due to lack of investible capital.
Inter-banking transaction of other BFIs except the commercial banks has also been reduced compared to last FY. The transaction has reduced by Rs 113.52 billion. The BFIs had carried out transactions worth Rs 120.75 billion last year but that has shrunk to Rs 7.18 billion this year. Inter-banking lending rate of those BFIs has dropped to 4.25 percent at present. Las year the rate was 5.8 percent.
There has been concern regarding he declining level of liquidity in the market like last year. However, looking at the inter-banking interest rate, experts say that there is no lack of investable capital in the market currently. According to NRB, the liquidity was Rs 70 billion one month back, whereas it has now reduced to Rs 27 billion.