Kathmandu, March 14: Commercial banks, development banks and finance companies have reduced the interest rates of deposits and loans with effective from Wednesday.
Nepal Bankers Association (NBA), the umbrella organization of commercial banks, decided to reduce the interest rate of loans and deposits for March 15 to April 13. Banks and financial institutions have informed about this through a notification today.
Chairman of NBA Mr Sunil KC has informed that it has been decided to reduce the premium rate on deposits to 0.4% and 1% on loans from tomorrow, March 15.
He said that the association is focused on reducing the interest rate of loans as well. At present, banks used to charge a premium of up to 6% on the base rate of loans. Now after a 1% reduction, they will set a premium rate of up to 5% on the base rate.
Similarly, they will give interest from a minimum of 6 percent to a maximum of 8 percent on normal savings towards deposits. Earlier, the interest rate was set from a minimum of 6.42% to a maximum of 8.42% on normal savings. The interest rate of fixed deposits has been kept constant. Currently, banks have been providing a maximum of 11 percent interest on fixed deposits.
Similarly, 9 percent interest rate has been set for institutional and 12 percent interest rate for ‘remittance’ term account.
Similarly, the Development Bankers Association (DBA), which is the umbrella organization of development banks, has reduced the interest rate of term deposits to 0.25% for March-April.
According to the decision of the association, development banks have fixed the interest rate of personal fixed deposits of one year or more at 11.60 percent from March-April. Likewise, the interest rate of term deposits of less than one year remained at 11.50%.
At present, development banks have been providing 11.75% interest rate on individual term deposits of one year or more.
Similarly, along with the reduction of interest rates, development banks will provide 9.60% interest rate on institutional term deposits of one year or more and minimum 6.60 percent to 8.60 percent interest rate on normal savings.
Similarly, Nepal Financial Institutions Association (Finance) has reduced the interest rate of fixed deposits by 0.20%. The association has decided to reduce the interest rate of deposits above three months to 0.15%.
Finance companies have been providing 12.10% interest on one-year term deposits, but they have maintained the interest rate at 11.90% from March 15.
