Bankers exert pressure on NRB not to intervene in service fees they charge to their clients

Published On: February 11, 2021 06:30 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Feb 11: Commercial banks that are facing allegations of charging service fees in an arbitrary manner from their clients have piled up pressure on Nepal Rastra Bank (NRB) to provide them autonomy to determine the service charge amount to their clients.

In a meeting conducted by the NRB with the executives of 27 commercial banks on Wednesday, the bankers urged the central bank not to intervene in the pricing policies of the banks, according to NRB officials.

Clients of various commercial banks complain time and again that they charge them high service charges under various headings. Although the NRB has directed the banks to limit their service charges, they have been defying the regulator’s guideline on the pretext of maintaining their profit amount as the interest rate has seen a sharp fall lately.

According to NRB officials, bankers have also demanded the regulator to lift the existing threshold of interest rate spread imposed by the central bank.

The Monetary Policy 2020/21 has maintained the spread limit at a maximum of 4.4 percent in interest rate fixed by the banks. Bankers, however, termed the fixed spread rate determined by the NRB inappropriate, claiming that the spread rate has already come below four percent due to excess liquidity that exists in the market.

Bankers have also urged the NRB to reduce loan loss provision for the COVID-19-affected firms from five percent to two percent. In addition, they have also demanded to categorize separately the credit provided to these firms and maintain a flexible policy on such loans.


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