Banks and financial institutions (BFIs) have decided to implement the decision to reduce the interest rate beginning from Wednesday.
Earlier, Nepal Bankers' Association, an umbrella organisation of commercial banks, agreed to reduce the premium rate on loans by one percent and the interest on savings by 0.4 percent from March 15, the BFIs informed about this through a notice today.
According to Association chair Sunil KC, now they are focused on capping the interest rates. As per the revised provisions, banks will charge a premium rate on loans up to five percent instead of six percent and will provide 6 to 8 percent interest on normal savings. Prior to this, the bank interests on normal savings were 6.42 to 8.42 percent. The interest rate on fixed deposits is unchanged and it remains at 11 percent.
Similarly, towards institutional savings, 9 percent interest rate has been fixed and towards the remittance fixed deposit, it is 12 percent.
Likewise, Development Bankers' Association, an umbrella organisation of development banks, decided to reduce the interest on fixed deposits by 0.25 percent beginning from March 15. As per the revised provision, commercial banks shall provide 11.60 percent interest on fixed deposit (individual) with one or more than one-year term and 11.50 percent on the deposits with less than one-year tenure.
Towards the institutional accounts, now development banks provide 9.60 percent interest on the fixed deposits and 6.60 to 8.60 percent on the normal savings.
Similarly, Nepal Financial Institutions Association has decided to deduct the interest on fixed savings of one-year term by 0.20 percent and provide it 11.90 and by 0.15 percent on the deposits with a tenure of over three months.
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