Banks are going to reduce the interest rate on savings in March and keep the interest rate on fixed deposits unchanged.
Santosh Koirala, Vice President of the Bankers' Association, said that the full meeting of the association held on Thursday morning decided to keep the interest rate on fixed deposits unchanged and reduce the interest rate on savings by 0.4 percentage points.
He said that the interest rate of 6.4 percent to 8.4 percent on savings will be maintained at 6 percent to 8 percent in March. The National Bank has arranged that the difference between the maximum interest rate of fixed deposits and the minimum interest rate of savings should not exceed 5 percent. Also, there is a provision that the difference between the upper and lower interest rates of savings should be maintained at a maximum of 2 percent. Bankers Association has decided to maintain the interest rate of 6% to 8% of savings while keeping the interest rate of fixed deposits at 11% within the guidelines of the National Bank.
He said that it has been decided not to charge more than 5 percent interest on the base rate for similar loans. "It has been decided to reduce the interest rate of savings by 0.4 percentage points while keeping the interest rate of fixed deposits unchanged," said Koirala, Vice President of the Bankers' Association, who is also the Chief Executive Officer of Machhapuchhre Bank.
The share of savings in total deposits is about 27 percent. Banks say that reducing the interest rate on savings by 0.4 percent will help reduce the cost of deposits along with the base rate and help reduce the interest rate on loans. The National Bank has made arrangements to give an interest rate of only 50 percent of the minimum interest rate of savings even on-call deposits.
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