Banks Reduce Interest Rates To Single Digit After NRB Intervention

October 22, 2021 | Investopaper

Commercial banks have reduced the maximum interest rate on term (fixed) deposits to single digit. After the intervention of Nepal Rastra Bank, the interest rates issued by the banks for the month of Karthik have been revised.

As per the revised interest rate, commercial banks will now pay a maximum of 9.36 percent interest on individual term deposits. Similarly, development banks have fixed maximum interest rate of 9.50 percent and finance companies 9.60 percent.

NRB was forced to intervene after the banks raised the interest rate to above 11 percent on both individual and institutional fixed deposits. NRB has made a provision not to change the interest rate more than 10 percent as compared to the previous month as unhealthy competition has intensified in the interest rate hike.

Similarly, provision has been made to reduce the interest rate on institutional fixed deposit by 1 percent less than individual fixed deposit.

The table below presents the interest rate in fixed deposits offered by the commercial banks in Nepal

Fixed Deposit Interest Rate In Commercial Banks Of Nepal

Note: The interest rates are based on the notice published by the respective banks. The rates are effective from Karthik 5, 2078 BS. At present, the interest rate may vary. 

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