Banks agree to fix interest rate at 9.25 pc for private deposits

Published On: December 21, 2018 03:34 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, Dec 21: The banks have reached a gentleman agreement to fix the interest rate at 9.25 percent for the private fixed deposits, 6 percent for saving deposits and 8.5 percent for institutional fixed deposits.

On December 4, Nepal Bankers’ Association had decided to lift the ceiling of interest rate imposed on private deposits.

Following the decision, the various banks hiked the interest rate up to 13 percent for the fixed deposits. With the interest rate hike in the fixed deposits, the banks started charging interest rate on the loan taken by clients. Nepal Rastra Bank (NRB) and the Ministry of Finance had been piling pressure on the banks to withdraw the decision to hike the interest rate.

Finance Minister Yuba Raj Khatiwada had formed a panel led by Deputy Governor Shivraj Shrestha to this effect. The interest rate for the deposit was reduced upon the submission of the panel’s report.

The committee on Wednesday submitted a report along with some suggestions in a bid to resolve the problems seen in the capital market.

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