Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Interest rates offered by commercial banks in Nepal on fixed deposits have declined again for the month of Chaitra, reflecting continued liquidity improvement in the country’s banking system and the broader trend of easing borrowing costs across the financial sector.
From Chaitra 1 (mid-March), six commercial banks reduced the interest rates on term deposits, bringing the average interest rate for individual fixed deposits down to 4.49 percent, according to updated rate announcements issued by banks.
The latest rate represents a decline of 0.08 percentage points from the previous month. In Falgun, the average interest rate for individual depositors stood at 4.57 percent.
Institutional Deposit Rates Also Decline
Interest rates for institutional fixed deposits also saw a modest drop. Banks reduced the average institutional deposit rate by 0.04 percentage points to 3.29 percent for the month of Chaitra.
In the previous month, the average institutional rate was 3.33 percent, indicating a gradual downward adjustment as banks rebalance deposit costs amid improving liquidity and slower credit growth.
Six Banks Reduce Deposit Rates
A total of six commercial banks lowered their fixed deposit interest rates for Chaitra. These include:
Agricultural Development Bank
Nepal Bank Limited
Kumari Bank
Global IME Bank
Prime Commercial Bank
Standard Chartered Bank Nepal
With the adjustment, the maximum interest rate available on individual fixed deposits in the market is now around 5 percent, depending on tenure and bank-specific schemes.
Fourteen Banks Keep Rates Unchanged
Meanwhile, 14 commercial banks maintained their existing fixed deposit rates for the month, signaling a wait-and-see approach amid evolving financial market conditions.
Banks that kept their rates unchanged include:
Everest Bank Limited
Nepal SBI Bank
Siddhartha Bank
Sanima Bank
Nepal Investment Mega Bank
Laxmi Sunrise Bank
Citizens Bank International
Prabhu Bank
Machhapuchchhre Bank
NMB Bank
Himalayan Bank
Nabil Bank
Rastriya Banijya Bank
NIC Asia Bank
Liquidity Improvement Behind Rate Cuts
The gradual decline in deposit rates follows months of improving liquidity conditions in Nepal’s banking sector. With deposit growth outpacing credit expansion and the central bank maintaining accommodative monetary conditions, banks have begun reducing the cost of funds.
Lower deposit rates also generally lead to cheaper lending rates, a development closely watched by businesses, investors, and borrowers as Nepal’s economy seeks stronger credit-driven growth.
In recent months, the banking industry has seen falling base rates and declining lending costs, indicating a broader shift toward easing financial conditions in Nepal’s banking and financial system.
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