KATHMANDU, May 14: Nepali commercial banks reduce interest rate on their fixed deposit by an average of 0.06 percent for the next month starting Friday.
The reports of 20 commercial banks show that they have fixed the interest rate on individual deposits at 4.34 percent, down from 4.40 percent. The interest rate on institutional fixed deposits has been fixed at 3.21 percent per annum.
Revised interest rate corridor system introduced
A total of seven commercial banks have reduced interest rates on individual fixed deposits. These include NMB Bank, NIC Asia Bank, Himalayan Bank, Kumari Bank, Standard Chartered Bank, Citizens Bank and Nepal Bank Limited.
Siddhartha Bank, however, has increased its interest rate by 0.05 percent to 4.05 percent for the review month. NMB Bank offers the highest interest rate of 4.80 percent for its customers.
Nepal Rastra Bank has been frequently mopping up excessive liquidity in Nepal’s banking system to maintain stability in interest rate. However, banks have been experiencing high liquidity surplus, with banks holding around Rs 800 billion excessive funds due to sluggish credit demand.
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