Banks To Raise Interest For the Month of Ashoj; Individuals Deposit Interest Rates Will Increase to 12.13%

The umbrella association for commercial banks, the Nepal Bankers Association (NBA), has given the banks the right to determine the interest rate. The decision was made at the union meeting on Thursday to maintain the bank's interest rate in Ashwin, which has remained constant over the past six months.

One of the key reasons NBA implemented an open interest rate policy while adhering to Nepal Rastra Bank policy is the current liquidity crisis.

Now the banks are free to raise the interest rate in Ashoj. Accordingly, there is a clause that allows banks to set the interest rate by just modifying the average rate announced earlier by 10%.

Currently, banks offer fixed deposit interest rates to individuals and institutions of 11.03% and 9.03%, respectively. There is 12.03% of remittance interest. 9.53% is the institutional maximum interest rate. Hence, the interest rate can now be hiked by 10%, making it 12.13% for individuals and 9.93% for institutions.

Through the monetary policy of the current fiscal year, Nepal Rastra Bank also proposed the policy of raising the interest rate. The bank rate was raised from 7% to 8.5%, the policy rate was raised from 5.5% to 7%, and the deposit collecting rate was raised from 4% to 5.5% by the Central Bank.