Himal Press 
KATHMANDU: Commercial banks have further lowered deposit interest rates for the month of Jestha (mid-May to mid-June) as excess liquidity continues to build up in the banking system amid sluggish credit growth.
Banks have been reducing deposit rates in recent months to lower their cost of funds, as deposit growth has consistently outpaced lending growth.
Private sector credit disbursed by BFIs expanded by 5.7% to reach Rs 5,809.66 billion over the first nine months of the current fiscal year. Deposits, on the other hand, grew by 8.5% to Rs 7,879.54 billion in the review period.
Although banks are under pressure to reduce interest expenses, the central bank has set a floor on savings deposit rates through its interest rate corridor mechanism. Since banks offering savings rates below 2.75% are not eligible for the central bank’s standing deposit facility, they cannot reduce rates beyond that cap.
Out of 20 commercial banks in the country, six have reduced their maximum rates on individual fixed deposits compared to the previous month, while only Siddhartha Bank slightly increased its rate. Thirteen banks kept their rates unchanged.
With this, the average maximum interest rate on individual fixed deposits has declined from 4.39% in Baisakh (mid-April to mid-May) to 4.34% in Jestha (mid-May to mid-June).
NMB Bank reduced its individual fixed deposit rate by 0.20 percentage points to 4.8% for the coming month. Rastriya Banijya Bank Ltd kept its maximum fixed deposit rate unchanged at 4.75%, while NIC Asia Bank lowered its rate from 4.75% to 4.5%.
On the other hand, Kumari Bank is at the bottom of the table, offering an individual fixed deposit of 3.96% for the new month, the lowest among commercial banks in the country.
Meanwhile, interest income of commercial banks increased by a modest 2.09% over the first nine months of fiscal year 2025/26. Commercial banks mobilized Rs 142.68 billion as interest income till mid-April of the current fiscal year, up from Rs 139.76 billion in the same period of the previous fiscal year.
Maximum Interest Rates for Individual Fixed Deposits
