NRB starts investigation on BFIs misusing benefits of remittance account to lure depositors with high interest rates

Published On: November 9, 2022 08:05 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Nov 9: Nepal Rastra Bank (NRB) has asked banks and financial institutions (BFIs) to send the details of remittance based deposit accounts in order to investigate the undue benefits that the BFIs have been taking using this type of accounts.  

The central bank has stepped up the move after it received a number of complaints over the issue. BFIs are reported to be collecting deposits from local people and organizations by offering benefits of the remittance account being provided by NRB.

To attract migrant workers to deposit their money in the country’s BFIs, NRB has allowed the BFIs to provide one percent more interest on such deposits compared to the normal deposits. Under the provision, the BFIs now provide an interest rate of 10.133 percent per annum on a savings account, while they provide an interest rate of 13.133 percent per annum on fixed deposits of the remittance account.   

However, many BFIs are found making their local clients self-declare the money to be deposited as the ones earned through foreign employment. The BFIs have been found using this pretext to lure other depositors amid ongoing crisis of the loanable funds. 

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