Nepal Rastra Bank (NRB) has started investigating the banks taking high loan renewal charges after directing the banks to return the interest charges set against the rules.
NRB had sent letters to all commercial banks last week, asking for details of loan renewal and fees taken from customers in previous fiscal year 2021/22 and the first quarter of the current fiscal year 2022/23.
Similarly, NRB has sought clarification as the actual interest rate of banks for institutional fixed deposits are higher than the published interest rate.
NRB has received complaints that banks have been providing higher interest rates to customers, encouraging them to declare the deposit as remittance deposits in order to increase bank deposits.
Hence, the banks are instructed to submit details of previous fiscal year and the current fiscal yearto NRB within 16 November.
In the preliminary investigation, NRB had found that the banks had taken NRs. 3.5 billion as interest above the interest rate set by the central bank.
As many as 11 banks were directed to return around NRs. 2 billion to the customer which was taken as interest above the interest rate.
NRB is studying financial details of other banks and the amount of interest that banks will have to return to borrowers may increase from NRs. 3.5 billion.
In the meantime, the NRB is studying about loan renewal charges after receiving complaints regarding high loan renewal fee being charged by the banks.
