The Nepal Rastra Bank (NRB) has stepped in to contain the interest rate pull up by the Bank and Financial Institutions (BFIs).
Revising the interest on the deposits, the BFIs have raised the rate of interest on saving and fixed deposits. Some of the commercial banks have raised the interest rate up to 11.67 per cent on fixed deposits.
The Deputy spokesperson of NRB, Narayan Prasad Pokhrel said that NRB has released the statement to the BFIs to take immediate action through the Unified Directives. He said that the main objective of the directives is to contain the competition of raising the interest rate on deposits of BFIs. If the interest rate sporadically rises then it the cost of fund to the borrowers will increase, which ultimately will affect the economy in the longer term.
The Himalayan Bank is providing 11.67 per cent interest on fixed deposits. Similarly, NIC Asia is providing 11.1 per cent, Nepal Bangladesh Bank is providing 10.28 per cent, Machhapuchhre Bank is providing 9.28 per cent, Kumari Bank is providing 10.31 per cent, Civil Bank is providing 10.61 per cent, NCC Bank is providing 10.55 per cent in fixed deposits.
Similarly, banks have been providing 4 to 7.5 per cent interest on saving deposits. At the time, when the banks have been indulging in triggering interest rates to lure depositors, NRB has notified the banks through a directive that the banks can only change the interest rate around 10 per cent of its previous month interest rate on any kind of deposits.
Similarly, it has also directed that institutions should get 1 per cent less interest rate on fixed deposits than the rate being provided to individual depositors. The NRB has sternly directed the BFIs to make immediate amendments in the interest rate they had published for the months of Kartik and publish the amended rate no later than October 22.
Source : TRN,