What it is
A bank can also be a borrower. It may take refinance from Nepal Rastra Bank for targeted lending, borrow from foreign banks and development agencies, or take loans from other lenders.
Borrowings are a planned source of funds with set terms, unlike deposits that customers can withdraw.
For most Nepali commercial banks this is small next to deposits.
How it is calculated
Sum of all loans taken by the bank: NRB refinance + foreign borrowings + other borrowings. Debt securities issued (bonds) are shown on their own line.
Worked on Nabil Bank Limited, FY 2082/83 Q4
NABIL's FY 2082/83 Q4 statement prints a dash for borrowings: nothing was outstanding on that date. Its funding came from customer deposits of Rs 59,255.94 crore and debentures of Rs 1,273.58 crore. A dash is information too: the bank was not using borrowed wholesale money.
What good looks like
Small and stable is typical. Foreign borrowing in dollars adds exchange-rate risk unless hedged.
Watch out
- Not the same as debentures (bonds), which are listed separately.
- Foreign currency borrowings cost more if the rupee weakens.
- NRB refinance is cheap but temporary; it ends when the scheme ends.
In Nepal
NRB has allowed commercial banks to borrow from foreign institutions within limits set in its directives and monetary policy; those limits change, so check the current text.
Questions
For longer-term or targeted money, for example a refinance line for agriculture, or when deposits alone cannot meet loan demand.
No. Deposits come from the public and can be withdrawn; borrowings are loans the bank took, with fixed terms and named lenders.