KATHMANDU, July 15: Development banks are set to reduce interest rates. A meeting of Development Bankers Association-Nepal has agreed to reduce the interest rate with effect from July 17.
While commercial banks were given the freedom to set their interest rates, development banks chose a more cautious approach, opting to bring down their interest rates.
Revised interest rate corridor system introduced
The decision was driven by the concern that leaving interest rates unrestricted might lead some banks to increase rates, potentially causing an imbalance in liquidity, according to an official of the association. To avoid this scenario, the Development Bankers Association collectively agreed to lower the interest rates.
Currently, development banks in Nepal are offering a maximum interest rate of 10.60 percent on term deposits. However, in light of the recent decision, this rate is set to decrease to 10.10 percent, starting from July 17.
