Bankers Association agree to maintain interest rates; Interest rate to be maintained at 7% & 11% for savings & fixed deposits respectively

Nepal Bankers Association has again made an agreement to maintain the interest rates. The association has made a gentleman’s agreement after conducting discussion with all the Chief Executives of the 28 commercial banks.

As per the agreement, interest rate on fixed deposits shall not be exceeding 10.50% for institutional depositors and not exceeding 11% for individual investors. In the previous agreement, the institutional investors could receive interest upto 11.15%.

Similarly, the banks can provide interest on saving deposit for interest rate not exceeding 7%.

The association has taken the decision of stabilizing the interest rate after agreement with Nepal Rastra Bank. Also, according to the agreement made with Nepal Rastra Bank, the central bank will be applying measure to prevent the interest rate for call deposit from increasing. It is supposed to be addressed in the upcoming Monetary Policy.

Similarly, the banks will be paying the interest of on the deposits in a quarterly basis. The agreement has also made restrictions in the interest rates for loans. Some of the banks have been determining the interest rate after adding 5/10% premium in the base rate which had affected in the reputation of the banks.

Nepal Rastra Bank and Ministry of Finance have also provided their approval in the recently made agreement. After the revocation of the previous agreement, the banks had started to provide upto 12% interest in fixed deposits for the individual depositors while the interest rate for the institutional depositors had reached to 14%.