Kathmandu, January 12
Commercial banks, which had been maintaining the interest rate since mid-October, have decided to reduce the interest rate on deposits from mid-January.
A meeting of the members of Nepal Bankers' Association (NBA) held on Wednesday decided to revise the interest rates for deposits by 1.13 percentage points for next month, that is, from mid-January to mid-February.
This means commercial banks will provide maximum interest rate of 11 per cent on personal savings deposits for the coming month. Similarly, the maximum interest rate for institutional saving deposits will be brought down to nine per cent, six per cent for general savings deposits, and eight per cent for deposits on remittance savings.
Earlier, the Nepal Rastra Bank (NRB) had directed banks to publicise the interest rates before the beginning of each month according to the Nepali calendar if the rates are to be changed.
According to Anil Sharma, executive director of the NBA, the board meeting decided to slash the interest rate as the indicators show liquidity situation in BFIs has eased.
"We've been reviewing the interest rate from previous month which show that the liquidity situation has eased with the drop in treasury bill rate, and credit-to-deposit (CD) at 86 per cent against NRB's threshold of 90 per cent," he said. "Moreover, the inter-bank rate has also come down to 6.2 per cent from eight per cent while there has been improvement in remittance inflow and deposit growth has surged by Rs 150 billion this year. And the BFIs have cleared the advance tax payment and refinancing facility of central bank also matured in between mid-December and mid-January."
At present, the commercial banks are providing maximum interest rate of 12.133 per cent on personal savings deposits.
Similarly, the maximum interest rate for institutional saving deposits is 10.133 per cent, 7.133 per cent for general savings deposits, and 9.13 per cent for deposits on remittance savings.
Meanwhile, the meeting has also elected Sunil KC, the CEO of NMB Bank, as its president. KC, who was previously serving as the vice-president of NBA, was elected unopposed as the new president after the tenure of outgoing president Anil Kumar Upadhyay, CEO of Agricultural Development Bank, ended.
Similarly, CEO of Machhapuchchhre Bank Santosh Koirala has been elected to the post of NBA vice-president.
The other members of the new executive committee of NBA include Ajay Bikram Shah, CEO of Laxmi Bank; Deepak Kumar De, CEO of Nepal SBI Bank; Krishna Bahadur Adhikari, CEO of Nepal Bank; Roshan Kumar Neupane, CEO of NIC Asia Bank; Sudesh Khaling, CEO of Everest Bank; and Suman Sharma, CEO of Sunrise Bank.
Likewise, Ashoke SJB Rana, CEO of Himalayan Bank, has been elected as the NBA adviser.
A version of this article appears in the print on January 13, 2023, of The Himalayan Times.
