Kathmandu: The commercial banks have decided to lower the interest rate both on deposit and credit for the month of Baisakh 2080. A meeting of the Nepal Bankers Association (NBA) held on Wednesday announced that the interest rate will be decreased by 10 percent point to 27 percent point.
According to NBA, the interest rate on personal term deposits will be lowered by 10 percent. At present, A-class banks offer an 11 percent interest rate on term deposits. Now, the new interest will be 9.99 percent from 1st Baisakh onwards. Similarly, the interest rate on institutional term deposits will be at 7.99 percent against the current rate of 9 percent.
The interest rate on savings deposits is lowered to 5.4 from 7.4 percent.
The new interest rate will lower the banks’ base rate which will ultimately lower the rate of interest on loans. The reciprocal effect of the recent decision of the NBA to lower the interest rate on deposits will be realized only after the fourth quarter end since the base rate is calculated on a quarterly basis. But from Baisakh, the interest rate on loans too will be lowered following the new base rate of banks. The banks had started lowering the deposit interest rate from the month of Magh. So, the interest cost for the banks declined in the third quarter.
Similarly, the Development Bankers’ Association has also decided to lower the interest rate by 10 percent point. Individual depositors will get 10.6 percent against term deposits from 1st Baisakh and institutional depositors will get 8.60 percent against term deposits.