Interest rate agreement between banks terminates
December 5, 2018 | Investopaper
Machhapuchhre bank (MBL) has issued today in an advertised notice that the bank will provide 12.5% interest rate on fixed deposits for individual account for the period of 1 to 5 years. After the dissolution of agreement between banks to maintain interest rate ceilings, banks can fix their own interest rate that they provide to deposit holders. Machhapuchhre bank will provide 0.5% extra interest depending on the client, amount of deposit and maturity period.
Similarly, Janata Bank (JBNL) will provide 12% interest rate payable monthly for individual depositors. The maturity period will be of 75 days or more. The minimum deposit required is Rs. 1 lakh.
The rising interest rate will increase the cost of fund of banks. This is likely to increase the interest on loans.