BFIs will not increase interest on deposits even in January

Credit crunch looms as commercial banks grapple with liquidity mismatch

KATHMANDU: Commercial banks are not going to increase the deposit interest rate even in January. The decision was taken by the Bankers Association meeting held on Monday. Since last November, commercial banks have not increased interest on deposits.

“It has been decided that the banks will publish interest rates equal to November for PUS,” said Anil Kumar Upadhyay, executive director of Nepal Bankers’ Association, “Since increasing the interest rate will not increase deposits and only increase the cost, the interest rate of deposits has been kept constant in PUS as well.”

He also informed that a decision will be made whether to increase or decrease the interest rate in January.

Lately, the industrialists have started protesting because the interest rate has increased. Some district organizations of the private sector have also announced the program of the movement. At this time, banks have decided not to increase interest on deposits.

After 6 months last October, banks increased the deposit interest rate by an average of 10 percent. The banks that published the October interest rate in October will continue the same sequence in November and January.

According to which, banks will now publish a maximum interest rate of 12.133 percent on personal term deposits for the month of January as well. Similarly, the maximum interest rate of 10.133 percent of one-year institutional term deposits will be maintained in January. A bank that gives 12.133 percent interest on personal term will have to give at least 7.133 percent interest on savings.

From last March to August, the commercial banks kept the deposit interest rate stable. According to which, the maximum interest rate of 11.03 percent was fixed on one-year personal term deposits.

Banks and financial institutions should publish the interest rates for the coming months before the end of this month according to the instructions of the National Bank. The published interest rate cannot be revised for one month.

Fiscal Nepal |
Wednesday December 14, 2022, 11:26:53 AM |

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