Three commercial banks raise their saving rates to 7%; Is this another broken Gentlemen's agreement?

The banking industry of Nepal, especially 'A' class commercial banks, have been facing the liquidity shortage problem for quite some time now. Given the small size of market, even a few arbas' up and down in deposits size leads to tightness in the economy leading to interest rate volatility and competition among banks.

In the interest of common good and to avoid healthy competition, Nepal Bankers' Association (NBA) has tried to bring balance in interest rate fluctuations by bringing all banks to a consensus. But the irony is, the Gentleman's agreement seems to break even at the slightest of pressure. This definitely makes us question, how vulnerable is the system?

According to the latest Gentlemen's agreement, the interest rate for saving accounts was to be limited within 5% to 7%. This would automatically also control the rates on call accounts. However, three commercial banks, Prime Commercial Bank (PCBL), Century Commercial Bank (CCBL) and Civil Bank (CBL), have published a notice today regarding their new interest rates that would be in effect from today itself. All the notices show that the rates for all schemes of saving account has been raised to 7%, which is still inside the limit. However, the matter of concern is the rate on call accounts. The interest on call acounts is determined by the minimum rate of saving account. But when all saving accounts are given 7%, then it effectively means that the rates on call account will also be 7%.

Now, the real matter of discussion is how will the rest of 25 commercial banks react to this? Will this lead to another meeting at NBA? Will this lead to another Gentlemen's agreement? Will rest of the banks ignore these three banks' move or will they also proceed to raise their rates?