Base rates of commercial banks have decreased with savings & fixed deposit rates; at what rates do they provide share loans? (With full list of 28 commercial banks)
Sun, Aug 19, 2018 10:32 AM on Exclusive, Interest Rates, Latest,
~Rishab Agrawal
Interest rates provided by commercial banks on deposits are said to have an impact on the investment in the secondary market. But this doesn’t seem to hold true. The following are the latest interest rates provided by all the listed commercial banks. For comparison sake we have taken the interest rates of normal savings account, fixed deposit for 1 year, base rate, individual overdraft rate, marginal lending rate and interest rate on home loan. These are the latest rates posted by the banks and this information has been taken from their respective websites.
|
S. No. |
Symbol |
Name |
Individual Savings Rate % |
Fixed Deposit Rate (1 Year) % |
Base Rate (BR) % |
Margin Lending Rate |
Individual Overdraft Rate |
Home Loan Rate |
|
1 |
NBL |
Nepal Bank Limited |
2 |
8 |
7.03 |
BR+6.07% |
BR+6.57% |
BR+4.07% |
|
2 |
ADBL |
Agricultural Development Bank Limited |
4.25 |
9.50 |
11.73 |
BR+1% to 5% |
BR+1% to 7% |
BR+1% to 4% |
|
3 |
NABIL |
Nabil Bank Limited |
3 |
10.5 |
7.78 |
BR+5.5% to 7.5% |
BR+6.5% to 7.5% |
BR+3% to 6.5% |
|
4 |
NIB |
Nepal Investment Bank Limited |
3.5 |
9 |
9.02 |
BR+1% to 6% |
BR+0.75% to 6.75% |
BR+0.75% to 6% |
|
5 |
SCB |
Standard Chartered Bank Nepal Limited |
2 |
10 |
7.87 |
BR+2% to 4% |
BR+3.5% to 6.5% |
BR+2.5% to 5.5% |
|
6 |
HBL |
Himalayan Bank Limited |
2.5 |
11 |
9.66 |
BR+ up to 7% |
BR+ up to 6% |
BR+ up to 6.5% |
|
7 |
SBI |
Nepal SBI Bank Limited |
2.25 |
10.5 |
10.12 |
BR+3.75% to 6% |
BR+2.5% to 5% |
BR+2% to 5% |
|
8 |
NBB |
Nepal Bangladesh Bank Limited |
5 |
10 |
11.51 |
BR+1% to 5% |
BR+1% to 6% |
BR+0.5% to 5% |
|
9 |
KBL |
Kumari Bank Limited |
6 |
10.5 |
11.6 |
BR+8% |
BR+6% |
BR+8% |
|
10 |
LBL |
Laxmi Bank Limited |
6 |
10.5 |
11.48 |
BR+1% to 5% |
BR+3% to 5% |
BR+1% to 5% |
|
11 |
SBL |
Siddhartha Bank Limited |
5 |
10.5 |
11.16 |
BR+ up to 6% |
BR+ up to 5.5% |
BR+ up to 5% |
|
12 |
CZBIL |
Citizens Bank International Limited |
6 |
10.5 |
11.78 |
BR+ 1% to 4% |
BR+0.25% to 4% |
BR+1% to 5% |
|
13 |
PCBL |
Prime Commercial Bank Limited |
5 |
10.25 |
10.47 |
BR+ up to 5% |
BR+ up to 5% |
BR+ up to 5% |
|
14 |
SRBL |
Sunrise Bank Limited |
4 |
7.5 |
11.39 |
BR + up to 6% |
BR+ up to 6% |
BR+ up to 6% |
|
15 |
JBNL |
Janata Bank Nepal Limited |
5 |
10.5 |
11.6 |
BR+ up to 5% |
BR+ up to 4% |
BR+ up to 3% |
|
16 |
MEGA |
Mega Bank Nepal Limited |
6.5 |
10.5 |
11.38 |
BR+ up to 4.5% |
BR+ up to 7.5% |
BR+ up to 8% |
|
17 |
CCBL |
Century Commercial Bank Limited |
7 |
10.5 |
12.08 |
BR+4.45% to 6.45% |
BR+3.45% to 5.45% |
BR+3.45% to 5.45% |
|
18 |
SANIMA |
Sanima Bank Limited |
5 |
10.5 |
10.66 |
BR + up to 6% |
BR + up to 6% |
BR+ up to 6% |
|
19 |
MBL |
Machhapuchchhre Bank Limited |
4 |
10.5 |
11.06 |
BR+ up to 5% |
BR+ up to 5% |
BR+ up to 5% |
|
20 |
NICA |
NIC Asia Bank Limited |
5 |
10.5 |
11.16 |
BR+ up to 7% |
BR+ up to 7% |
BR+ up to 7% |
|
21 |
GBIME |
Global IME Bank Limited |
4 |
10.5 |
10.55 |
BR+ up to 6% |
BR+ up to 5% |
BR+ up to 4% |
|
22 |
CBL |
Civil Bank Limited |
7 |
10.5 |
11.84 |
BR+ up to 5% |
BR+ up to 4% |
BR+ up to 5% |
|
23 |
PRVU |
Prabhu Bank Limited |
6 |
10.5 |
10.62 |
BR+3.83% to 5.33% |
BR+3.33% to 5.33% |
BR+2.83% to 4.83% |
|
24 |
NMB |
NMB Bank Limited |
4.5 |
10.5 |
10.7 |
BR+5% to 7% |
BR+4.5% to 5.5% |
BR+2% to 4% |
|
25 |
EBL |
Everest Bank Limited |
3 |
10.5 |
8.45 |
BR+1.75% to 6.75% |
BR+2.5% to 7.5% |
BR+1.5% to 6.5% |
|
26 |
NCCB |
Nepal Credit & Commercial Bank Limited |
7 |
10.5 |
11.92 |
BR+ up to 7% |
BR+ up to 5% |
BR+ up to 4% |
|
27 |
BOKL |
Bank of Kathmandu Limited |
3.50 |
10.5 |
10.67 |
BR+0.50% to 6% |
BR+ up to 6% |
BR+0.50% to 6% |
|
28 |
RBB |
Rastriya Banijya Bank |
2.25 |
6.25 |
6.2 |
BR+4% to 6% |
BR+3% to 5.5% |
BR+3% to 4% |
As we can see, the interest rates on deposits have decreased. This should have resulted in inflow of capital in the share market but no such trend is seen yet. When NEPSE index started falling from 1400 points mark, it was said to be due to increasing rates on deposits; but now this isn’t the case. Also, it is clear from high rates on lending that the commercial banks are trying to curb the flow of money in the economy. It has also impacted existing borrowers as they end up paying more interest on loans, one of the main reasons why the month of Asadh is feared by most borrowers as they are required to pay interest on their loan.
|
Average Rate |
|
|
Individual Savings |
4.509 |
|
Fixed Deposit |
10.036 |
|
Base Rate |
10.410 |
If we look at the average rate of the industry, we can see that average individual savings rate stands at a mere 4.51% and that of fixed deposit at 10.03%. While the average base rate is as high as 10.41%. From the data above, 15 commercial banks have above average savings rates they are-
- NMB Bank Limited
- Prime Commercial Bank Limited
- Sanima Bank Limited
- Siddhartha Bank Limited
- NIC Asia Bank Limited
- Nepal Bangladesh Bank Limited
- Janata Bank Nepal Limited
- Prabhu Bank Limited
- Laxmi Bank Limited
- Kumari Bank Limited
- Mega Bank Nepal Limited
- Civil Bank Limited
- Nepal Credit & Commercial Bank Limited
- Century Commercial Bank Limited
- Citizens Bank Limited
Similarly, only 8 commercial banks have below average base rate on comparison with industry’s average base rate. They are-
- Rastriya Banijya Bank
- Nepal Bank Limited
- Nabil Bank Limited
- Standard Chartered Bank Nepal Limited
- Everest Bank Limited
- Nepal Investment Bank Limited
- Himalayan Bank Limited
- Nepal SBI Bank Limited
Other 20 commercial banks have above average base rates with the said rate going as high as 12.08%. One thing to be noted here is that low base rate doesn’t particularly mean low lending rates. The lending rates on different types of loan depends on the premium rate added by the bank to their base rate which may range anywhere between 0% and 8% as per the data mentioned in the above table.
Despite the decrease in interest on deposits, inflow of money in the share market cannot be seen. This is a cause of worry as it hampers the development of secondary market. The market right now struggles to achieve a decent amount of daily turnover. It seems as if people have lost hope and confidence in the secondary market and are satisfied with the nominal but assured returns from banks. If we are expecting double digit growth of the economy in the coming years, this is one of the primary things that require attention or else our expectations won’t become a reality anytime soon.
