Some of the commercial banks, mainly newcomers, have been heavily dependent on deposits owned by the major CSIs and there have been reports of unsound dealings to attract these huge deposits, including offers of unnaturally high interest rates on deposits and bribing CSI officials concerned to secure the deposits, said an officer of the central bank.
NRB is planning to ensure around 6.75 percent interest rate on bonds to CSIs, which is higher than the existing market rate, said the official, adding that the central bank is also planning to reserve some amount of domestic borrowing for the CSIs from next fiscal year. “The reserve amount may go up to 20 percent of the total planned domestic borrowing,” said the official.
According to estimates, the four leading CSIs have total deposits of around Rs 45 billion, with the Employees Provident Fund and Nepal Army Welfare Fund alone commanding more than 70 percent of the total.
Revised interest rate corridor system introduced
