KATHMANDU, July 16: Nepali commercial banks have moderately reduced interest rates for the next one month starting Friday.
According to public notices issued by 20 commercial banks, they reduce interest rates on individual deposits by an average of 0.09 percentage points, reducing the interest rate to 4.17 percent for the period between mid-July and mid-August from existing 4.26 percent. The interest rate on institutional deposits has been reduced to 3.12 percent from 3.18 percent.
Overall, six banks have reduced their interest rates for their clients. Rastriya Banijya Bank has reduced the interest rate on personal deposits by the highest rate of 0.75 percentage points and Global IME Bank by 0.5 percentage points. Likewise, NMB Bank has reduced the maximum interest rate on personal deposits by 0.25 percentage points, Citizens Bank International by 0.15 percentage points, Standard Chartered Bank by 0.1 percentage points and Kumari Bank by 0.06 percentage points.
Revised interest rate corridor system introduced
Nabil and Prabhu Bank have offered their depositors with the highest interest rates of up to 4.55 percent per annum. Kumari Bank and Standard Chartered Bank offer the lowest interest rate of 3.85 percent.
Banks pay one percent more interest on remittance accounts than on personal fixed deposits. Banks have been successively reducing their interest rates for a long time as they have been piled up with excessive loanable funds with them.
The banks and financial institutions (BFIs) have a loanable amount of more than 1.3 trillion. After they are unable to disburse adequate loans they have been keeping money with Nepal Rastra Bank at an interest rate as low as 2.50 percent.
Currently, the BFIs maintain a deposit collection of Rs 8.28 trillion, out of which Rs 5.63 trillion has been invested in loans. Deposits with the BFIs are reported to have increased due to the exorbitant amount of over Rs 200 billion in remittances being received on a monthly basis.
