Commercial Banks Revise Interest Rates for Kartik: Notable Changes and Four Banks Maintain Stability

Commercial banks in Nepal have unveiled their revised interest rate profiles for the month of Kartik, effective from Kartik 01. Most banks are offering annual interest rates ranging from approximately 5.00% to 7.00% for savings accounts, while individual customers can earn a maximum interest rate of 11% per annum on fixed deposits (FDs). Institutions, on the other hand, can secure a competitive interest rate of 9% per annum on their fixed deposits.

Standard Chartered Bank (SCB) has made notable adjustments to its interest rates. Specifically, the bank has chosen to lower the interest rate for institutional fixed deposits (FD) to 5%. However, for individual fixed deposits held for 91 days, SCB offers an attractive interest rate of 9.22%. Meanwhile, for fixed deposits with a maturity period of one year or longer, the interest rate stands at 5.5%.

In contrast to these FD rates, SCB has maintained its standard savings account interest rate, which continues to range between 4.25% and 5.30%.

In a comparative analysis, 14 banks have reduced their interest rates in Kartik compared to Ashwin. Additionally, four banks have maintained a consistent interest rate from Ashwin to Kartik, while two banks have increased their interest rates.

Among the 20 banks, Everest Bank has recorded the highest reduction in interest rates for Kartik compared to Ashwin. The bank has lowered its interest rates by 1.83%. Specifically, their individual fixed deposit interest rate, which was 11.054% in Ashwin, has decreased to 9.224% in Kartik. In contrast, Prime Commercial Bank, Nabil Bank, and Nepal Investment Mega Bank have also reduced their interest rates by more than 1%.

Similarly, in simpler terms, Nepal Rastra Bank mandates that banks cannot change their savings and fixed deposit interest rates by more than 10% compared to the rates they published in the previous month.

Meanwhile, it's essential to maintain a relatively small interest rate gap, with no more than a 5% difference between the minimum interest rate for regular savings accounts and individual fixed deposits (FDs). Similarly, when dealing with institutional FDs and individual FDs, there should be a maximum interest rate difference of 2% to ensure fairness. However, there is a provision for remittance savings and term deposits, allowing banks to offer an additional 1% interest rate over personal savings and term deposits. Furthermore, it's important to note that there are limits to the interest rates that can be offered on call accounts; banks are prohibited from offering interest rates exceeding 50% of the minimum savings interest rate.