March 1: Nepal Rastra Bank has decided to take action against the banks that exceed the spread rate.
The central bank has made it clear that banks cannot charge spread rate of more than 4.4 percent under the existing rule. However, NRB noted that some banks have been disregarding this provision and has warned them of taking action as per the existing laws.
It has been learnt that the central bank took such decision after considering the fact that banks crossing the limit of spread rate would cause extra burden on rate of interest on loan.
Issuing a circular on Sunday (February 28), the central bank instructed all banks to adjust the excessive spread rate within the same quarter in which it has crossed the limit fixed by NRB.
“The board members and CEO of the institution which crosses the spread rate limit shall be charged in accordance to the Nepal Rastra Bank Act 2058,” reads the circular.
The central bank has also instructed banks to spend a maximum of 5 percent of fund allocated under their corporate social responsibility (CSR) to promote electronic transaction.
NRB stated that such instruction was given to the banks realizing the need to create awareness among the people and to make banking transaction technology friendly.