Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Commercial banks in Nepal have released their interest rate schedules for the month of Jeth (May-June 2025), with 14 banks maintaining their maximum rates on individual fixed deposits unchanged from last month. However, three banks—Nepal Bank, Everest Bank, and Sanima Bank—have slightly increased their rates, while Nepal Investment Mega, Kumari Bank, and Siddhartha Bank have reduced theirs marginally, according to the published lists.
The average interest rate on individual fixed deposits has dipped from 5.979% in Baisakh (April-May) to 5.952% in Jeth, reflecting a cautious adjustment amid varying financial pressures. Nepal Bank offers the lowest rate at 5.45%, up from 5.15%, while Everest Bank provides the highest at 6.64%, a slight rise from 6.61%. Other notable rates include Sanima Bank at 6.33% (up from 5.95%), Nepal Investment Mega at 5.5% (down from 6.5%), Kumari Bank at 5.91% (down from 5.92%), and Siddhartha Bank at 5.75% (down from 6%).
Banking executives attribute these adjustments to liquidity conditions and strategic priorities. The Nepal Rastra Bank has been tightening liquidity, prompting banks to tweak rates based on their capital needs. Some face pressure from high capital costs, while others, with excess funds, aim to reduce costs.
Loan demand varies, with some banks seeing increased activity and others none, influencing their rate-setting strategies. “With low loan demand and the season for capital expenditure, rates are unlikely to rise immediately,” said Govind Ghimire, CEO of NMB Bank, which maintained its rate at 6.6%.
Banks are favoring higher rates for long-term fixed deposits while offering lower rates for shorter terms, a move that could lower base rates and provide relief to borrowers by reducing loan interest rates. The Nepal Rastra Bank mandates a minimum 1% gap between individual and institutional deposit rates, and a decline in individual fixed deposit rates may lead banks to lower rates on savings, call deposits, and institutional deposits.
The adjustments reflect the banking sector’s response to economic conditions, balancing profitability with the need to stimulate lending in a challenging environment.
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