KATHMANDU, Feb 12: Commercial banks continue their trend of lowering interest rates, driven by a surge in liquidity over recent months.
Banks that previously offered around 9 percent interest rates for Magh (mid-January to mid-February) have now declared a maximum interest rate of 8.5 percent for personal term deposits during Falgun (mid-February to mid-March). The average interest rate, which stood at 8.16 percent in the month of Magh, is expected to decrease to 7.75 percent in Falgun.
This represents a reduction of 0.40 percentage points in the average interest rate from Magh to Falgun. The decrease in maximum interest rates for personal term deposits ranges from 0.06 percent to 0.81 percent.
The adjustment in interest rates is in response to banks reporting an increase in investable capital, attributed to slower-than-expected growth in loans despite a rise in deposits. The surplus in investable funds has prompted banks to lower interest rates in recent months.
Meanwhile, Everest, Laxmi Sunrise, Machhapuchhre, and Himalayan Bank have maintained their interest rates for Falgun, while other banks have opted for adjustments.
NMB Bank, offering the highest interest rate for Falgun, has set its rate at 8.50 percent. Other banks' rates include a minimum of 8 percent for fixed deposits. Furthermore, Kumari Bank and Nepal SBI Bank are offering 8.1 percent, while Citizens Bank's rate exceeds 8.25 percent.
On the lower end, Nabil Bank offers 7.75 percent, Prabhu Bank 7.50 percent, Nepal Bank 7.25 percent, Standard Chartered Bank, and Rastriya Banijya Bank, both at 7.35 percent, Prime Commercial Bank at 7.40 percent, Sanima Bank at 7.51 percent, Global IME Bank at 7.60 percent, and Agricultural Development Bank at 6.44 percent. These new interest rates will come into effect from February 13.