KATHMANDU, Aug 17: In a significant departure from the recently abolished cartelization of interest rates by the Nepal Bankers' Association during the month of Shrawan (mid-July to mid-August), commercial banks have now embraced individualized interest rate structures for the upcoming Bhadra month (mid-August to mid-September). This move has resulted in varying rates, especially for fixed deposits, with a majority of banks opting to increase their rates.
Effective from August 18, the revised deposit interest rates exhibit a wide spectrum across different banks. The newly published rates indicate that several banks, including Kumari Bank, Global IME Bank, Agriculture Development Bank, Nepal Bank, and NIC Asia Bank, have set a maximum interest rate of 10.89 percent for personal term deposits.
Revised interest rate corridor system introduced
Conversely, on the institutional front, these same banks have specified a maximum interest rate of 8.89 percent. This rate fluctuation is contingent upon the deposit tenure. The range spans from a high of 10.89 percent for longer terms to 7.29 percent for deposits maturing in less than one year or within three months.
Specifically, Standard Chartered Bank is offering a 7.29 percent interest rate for a 91-day period, while NMB Bank is providing an 8.10 percent interest rate for deposits lasting under six months. Notably, banks such as NMB Bank, Prime Commercial Bank, Standard Chartered Bank, and NIC Asia Bank have adjusted their interest rates downward compared to those of the Shrawan month.
At the lower end of the spectrum, Standard Chartered Bank stands out with a maximum interest rate of 8.92 percent for term deposits, and its institutional rate is set at 6.92 percent. Meanwhile, Nabil Bank, SBI Bank, and Himalayan Bank have retained stable interest rates.
Surprisingly, development banks have perpetuated cartelization practices into the Bhadra month, persistently raising their interest rates. This stance is evident among national-level development banks, as they've augmented the interest rate for personal deposits to 11.15 percent and for institutional deposits to 9.15 percent. This is a notable increase from the Shrawan rates, which stood at 10.10 percent for personal deposits and 8.10 percent for institutional deposits.
