Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Interest rates offered by Nepal’s commercial banks have continued their downward trajectory, with 19 out of 20 class ‘A’ banks fixing their maximum deposit rates below 5 percent for the month of Baisakh (mid-April to mid-May), reflecting easing liquidity pressure and moderating credit demand in the banking system.
According to the latest disclosures published by commercial banks, most lenders have either maintained or reduced their deposit interest rates for the review period, while only one bank—Standard Chartered Bank Nepal—has increased its rates.
Out of the 20 commercial banks, 10 have opted to keep their interest rates unchanged from the previous month (Chaitra). Among them:
Meanwhile, seven commercial banks have lowered their deposit rates:
In contrast to the broader market trend, Standard Chartered Bank Nepal has increased its maximum deposit rate to 5.10% for Baisakh, up from 4.15% in Chaitra, making it the only commercial bank to cross the 5 percent threshold this month.
The average maximum interest rate on individual fixed deposits has declined to 4.40% in Baisakh, marking a drop of 0.094 percentage points compared to the previous month.
Similarly, institutional fixed deposit rates have also edged lower, falling to 3.2295% from 3.29% earlier.
The decline in overall deposit rates is primarily attributed to rate cuts by seven commercial banks, which has pulled down the system-wide average and indicates improved liquidity conditions across Nepal’s banking sector.
The continued fall in deposit rates signals a shift in Nepal’s financial landscape, where excess liquidity and subdued credit demand are pushing banks to lower the cost of funds. This trend could eventually translate into cheaper lending rates, potentially stimulating business activity, investment, and consumption in the coming months.
Banking analysts note that unless credit demand rebounds significantly or liquidity tightens, the downward pressure on interest rates is likely to persist in the near term.
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