Banks and financial institutions lower interest rates

Published On: March 14, 2023 03:45 PM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 14: Commercial and development banks and financial institutions have lowered their interest rates with effect from Wednesday.

Nepal Bankers’ Association (NBA), the umbrella organization of ‘A’ class commercial banks of Nepal, had decided to reduce the interest rates on loans and deposits in March. Banks and financial institutions have informed the public about this through a notice today.

Sunil KC, president of the NBA, said that it has been decided to reduce the premium rate on deposits to 0.4 percent and one percent on loans from tomorrow, March 15.

He said the NBAis focused on reducing interest rates on loans. At present, banks are charging a premium of up to six percent on the base rate. Now after reducing it by one percent, the premium rate will be set up to five percent on the base rate.

Similarly, they will provide interest from a minimum of six percent to a maximum of eight percent on ordinary savings. Earlier, the minimum interest rate for ordinary savings was fixed at 6.42 percent to 8.42 percent. The interest rate of fixed deposits has been kept constant. Currently, banks are giving 11 percent interest on fixed deposits.

Similarly, nine percent interest rate has been fixed for institutional and 12 percent interest rate for 'remittance' term accounts. Similarly, Development Bankers Association Nepal, which is the umbrella organization of development banks, and ‘B’ class financial institutions, has reduced the interest rate of term deposits to 0.25 percent for March.

According to the decision of the association, development banks have fixed the interest rate of personal term deposits of one year or more at 11.60 percent from March. Likewise, the interest rate of term deposits of less than one year remained at 11.50 percent.

Currently, development banks have been giving 11.75 percent interest rate on personal term deposits of one year or more.

Similarly, along with the reduction of interest rates, development banks will provide 9.60 percent interest rate on institutional term deposits of one year or more and minimum 6.60 percent to 8.60 percent interest rate on ordinary savings.

Similarly, Nepal Financial Institutions Association (NFIA) has reduced the interest rate on fixed deposits by 0.20 percent. The association has decided to reduce the interest rate on deposits above three months to 0.15 percent.

The financial institutions have been paying 12.10 percent interest on one-year term deposits, but they have maintained the interest rate at 11.90 percent from March 14.

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