March 9: Commercial banks have decided to slash interest rates for the next month of Chaitra(mid-March to mid-April). A meeting of the Nepal Bankers’ Association held on Thursday took the decision to cut the interest rates on deposits and lending for the next month.
As per the NBA’s decision, the interest rate on deposits will be slashed by 0.4 percent, while one percent premium rate will be trimmed on lending starting from March 15.
Nepal Bankers’ Association Chairman Sunil KC said that the umbrella organization was working to reduce the interest rate on credit flow gradually.
Banks have been adding up to six per cent premium in the base rate at the moment. With the reduction of premium rate by one percent, banks can add up to five percent premium on the base rate from March 15 onwards.
Similarly, banks will provide interest from 6 to 8 percent in normal savings. Earlier, they were providing interest from 6.42 to 8.42 percent in normal savings.
Banks, however, have kept the interest rates on fixed deposits unchanged. Banks have been offering 11 per cent interest on individual fixed deposits. Likewise, they have determined 9 percent and 12 percent interest rates on institutional and remittance accounts respectively.
Industrialists, entrepreneurs and representatives of banks and financial institutions have been demanding for the reduction of the interest rates. Following pressure from all sides, NBA decided to trim the interest rates marginally.