NRB Directs Banks Not To Change Interest Rates By More Than 10 Percent
October 20,2021 | Investopaper
Nepal Rastra Bank (NRB) has issued a directive to re-determine the interest rate released by the banks and financial institutions for Karthik. The NRB has intervened in raising interest rates by issuing three-point directives to BFIs. As per the directive issued late on Tuesday, the new interest rate could be 10 percent below or above the interest rate set in Ashwin.
According to the NRB, banks will no longer be allowed to increase or decrease interest rates by more than 10 percent compared to the previous month. Also, the interest rate on term deposits on the individual side should be 1 percentage point higher than the institutional one.
Interest rates have risen due to lack of liquidity as deposits in the market have started to erode.
