NRB Sets Limit On Interest Rate Difference Between Term Deposits And Other Deposits At 5 Percent
December 4, 2020 | Investopaper
The central bank has fixed the limit on the difference between interest rate on term (fixed) deposits and other deposits. In the first quarterly assessment of the monetary policy of the current year, the central bank has issued such provision. Now, the banks should provide the interest rate gap of maximum 5 percent between fixed and other deposit products. At current, the interest rate on term deposits is higher while the interest rate on normal savings is very low.
This provision is applicable for all other deposits except call deposits. Banks have been reducing the interest rate on deposits saying that the amount to be invested in the bank has increased. NRB says that the low interest rate on loans has created an investment-friendly environment.
Similarly, the central bank has postponed the auction of collateral of debtors who have not paid interest for six months. NRB has made the arrangement after the complaint was raised that the banks and financial institutions had auctioned the collateral to the debtors who could not pay the installment
Similarly, share pledge loans will also be reviewed. Apart from that, real estate loans are also being reviewed. The central bank has said that it is trying to further simplify the refinancing provided to the tourism and hotel sector and the tourism sector and livestock business affected by Covid.
