Nine banks reduce interest rates for Jestha

Himal Press 13 May 2024
Nine banks reduce interest rates for Jestha

KATHMANDU: Nine out of 20 commercial banks in the country have lowered the interest rate on individual fixed deposits for the month of Jestha (mid-May to mid-June), as the banking sector reels under low credit demand.

Eight banks have kept their rates unchanged. Only three banks have made a slight upward revision to their interest rates for the coming month.

With this, the average interest rate on individual fixed deposits will drop to 7.06% in the next month compared to 7.14% at present.

Banks have been gradually reducing interest rates on deposits due to excess liquidity in the banking system and low credit growth. Bankers say there is liquidity of more than Rs 400 billion in the banking system at present.

The central bank allows banks to change their interest rates by a maximum of 10% of their average interest rate of the previous month.

Agriculture Development Bank Ltd is offering the lowest interest rate of 5.66% in the next month, followed by Nepal SBI Bank (6.39%), Rastriya Banijya Bank Ltd (6.4%), and Everest Bank (6.5%). Nabil Bank Ltd and Nepal Bank Ltd are offering 6.75% interest rates each, while Sanima Bank has fixed such rates at 6.9%.

Laxmi, Sunrise, Nepal Investment, Mega, Siddhartha, Standard Chartered, Citizens, and Prime Commercial are offering a 7% interest rate, while seven banks are offering interest rates above 7%. NIC Asia and NMB Bank Ltd are offering the highest (7.8%) interest rates on individual fixed deposits for the month of Jestha.

Commercial banks have started publishing rates individually based on market demand since the beginning of the current fiscal year in mid-July last year. Before that, the Nepal Bankers Association was imposing an interest rate cartel.

Published On: 13 May 2024


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