Average Spread Rate of Commercial Banks Declines to 3.24 Percent
November 11, 2021 | Investopaper
The average spread rate of commercial banks has declined by more than one percentage point in one year. As of Ashwin’s end 2078 BS, the average spread rate of banks stood at 3.24 percent. In the same period of the previous year, banks maintained a spread rate of 4.35 percent.
Spread rates have been declining due to intense competition from banks and financial institutions for business expansion. Nepal Rastra Bank has made a provision for class A commercial banks to maintain a spread of within 4.4 percent.
NRB started setting a spread rate two years ago to manage the interest rate of banks and financial institutions. The initial spread of 5 percent has been reduced to 4.4 percent. Similarly, development banks and finance companies are allowed to maintain a spread of up to five percent.
The table below presents the spread rate between loans and deposits of commercial banks in Nepal.
Interest Rate Spread Of Commercial Banks In Nepal
Spread Rate (In %)
| S.N. | Bank Name | Ashwin End, 2078 BS | Ashwin End, 2077 BS |
| 1 | Agriculture Development Bank Ltd. | 4.36 | 4.39 |
| 2 | Bank of Kathmandu Ltd. | 2.89 | 4.7 |
| 3 | Century Commercial Bank Ltd. | 2.74 | 4.31 |
| 4 | Citizens Bank International Ltd. | 3.53 | 4.4 |
| 5 | Civil Bank Ltd. | 3.29 | 4.26 |
| 6 | Everest Bank Ltd. | 2.61 | 3.94 |
| 7 | Global IME Bank Ltd. | 3.49 | 5.03 |
| 8 | Himalayan Bank Ltd. | 2.64 | 4.78 |
| 9 | Kumari Bank Ltd. | 2.71 | 4.36 |
| 10 | Laxmi Bank Ltd. | 3 | 4.38 |
| 11 | Machhapuchchhre Bank Ltd. | 3.38 | 4.33 |
| 12 | Mega Bank Nepal Ltd. | 3.48 | 4.38 |
| 13 | Nabil Bank Ltd. | 3.18 | 3.97 |
| 14 | Nepal Bangladesh Bank Ltd. | 3.23 | 4.88 |
| 15 | Nepal Bank Ltd. | 3.69 | 4.38 |
| 16 | Nepal Credit and Commerce Bank Ltd. | 3.33 | 4.38 |
| 17 | Nepal Investment Bank Ltd. | 2.59 | 4.14 |
| 18 | Nepal SBI Bank Ltd. | 3.09 | 3.94 |
| 19 | NIC Asia Bank Ltd. | 4.08 | 4.39 |
| 20 | NMB Bank Ltd. | 3.02 | 4.38 |
| 21 | Prabhu Bank Ltd. | 3.38 | 4.37 |
| 22 | Prime Commercial Bank Ltd. | 3.08 | 4.4 |
| 23 | Rastriya Banijya Bank Ltd. | 3.99 | 4.28 |
| 24 | Sanima Bank Ltd. | 2.69 | 3.61 |
| 25 | Siddhartha Bank Ltd. | 3.47 | 4.38 |
| 26 | Standard Chartered Bank Nepal Ltd. | 4 | 4.33 |
| 27 | Sunrise Bank Ltd. | 2.46 | 4.33 |
| Average Spread Rate (%) | 3.24 | 4.35 |
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