Interest on loan of commercial banks exceeds 12 percent

KATHMANDU: The average interest on loans of commercial banks has exceeded 12 percent amid protests from industrialists and businessmen. Due to the tight monetary policy implemented by Nepal Rastra Bank (NRB) and lack of liquidity in the market, the interest on loans has increased with the rise in operating cost of the banks.

According to NRB, the average interest rate of bank loans has reached 12.06 percent in August which was 8.57 percent last year. A report published by NRB on Friday mentions that the base rate of banks reached 10.01 percent by mid-September this year, which was 6.89 percent last year.

The industrialists and businessmen have started street protests since last week stating that the banks increased the interest rate on loans excessively. The relationship between industrialists and banks has become tense regarding the issue of interest rates.