KATHMANDU, April 13: Nepali commercial banks have reduced their interest rates on individual deposits by an average of 0.09 percent for the first month of the Nepali New Year 2083 starting Tuesday.
The reports unveiled by commercial banks show that they have fixed the interest rate at 4.40 percent for the month between mid-April and mid-May. At present, the interest rate stands at 4.49 percent.
Revised interest rate corridor system introduced
Citing low demand for loans, banks have been reducing interest rates for depositors to reduce their cost of funds. Since May 2024, banks have been maintaining their average base rate in single digits. Despite a notable decline in lending rates, banks have been unable to expand their loan portfolio due to the ongoing economic slowdown.
As of Thursday, the ‘A’ class banks have collected deposits of Rs 7.068 trillion as they have issued loans of Rs 5.217 trillion. The interbank interest rate has declined to 2.75 percent and their credit-deposit ratio has come down to as low 74.03 percent against the regulatory ceiling of 90 percent.
Out of 20 banks, 19 have maintained their interest rate on fixed deposit for individual persons at less than five percent. While, Siddhartha Bank will provide the minimum of four percent interest on the deposit, NMB Bank will provide the highest of five percent for next month.
Likewise, the interest rate on institutional fixed deposit has gone down by 0.06 percent. The banks have offered the interest rate of 3.23 percent for such depositors, down from existing 3.29 percent.
