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Banks Update Interest Rates for Bhadra; What Has Changed?

Banks have unveiled their interest rates profile for the month of Bhadra. While some have lowered their interest rates, most have kept it the same. Meanwhile, some banks have raised interest rates, plausibly due to fear of liquidity crunch after the Nepal Rastra Bank (NRB) scrapped the credit-capital-deposit ratio (CCD ratio) and maintained the loan-to-deposit ratio (CD ratio) in the new monetary policy.

Following the NRB’s policy of scrapping the CCD and implementing the CD, it has also become difficult for banks to invest. That is why some banks might have strategically raised interest rates right away. Meanwhile, it seems that some are waiting for instructions on how the monetary policy will be implemented.

As banks raise interest rates on deposits, the costs increase, and so does the base rate. An increase in the base rate then translates to an increase in the interest rate on loan schemes.

Nabil Bank previously gave interest payments in the range of 1.51% to 3.51% on savings. Now, the range has risen to 3.01% – 5.01%. The interest rate on savings has risen to a higher range of 5.51% – 7.51% for individuals and 6.01% – 8.01% for institutions. Previously, this range was 5.01% – 6.51% for individuals and 4.01% – 6.51% for institutions.

Nabil Bank’s base rate for the month of Ashar stands at 5.86%. It was 5.71% in the month of Jestha. With this, the interest rates on loan schemes have also gone up, since they are added as premium over the base rate.

Nepal Bank Limited has raised its interest payment on deposits. The range is now 3.05% – 4.55%, up from Shrawan’s range of 2.5% – 4%. Sanima Bank has also raised its interest rate on savings from 2.35% – 4.35% to 2.77% – 4.77%.

Individual fixed depositors previously got interest payments from 7% to 7.5% at Sunrise Bank. Effective from Bhadra 01, depositors will only get in the range of 6.5% to 7%. The base rate has fallen from 6.72% to 6.7%. Citizens Bank has slashed its interest rate range on savings from 3.15% – 5.15% to 3% – 5%. Kumari Bank has also brought its interest rates down. While the previous range was 3.15% – 4%, the bank only provides interest payments in the range of 2.5% to 3.5%.

Century Commercial Bank now pays a 2.5% – 4.5% interest rate on savings, compared to its previous range of 3.75% – 5%. Individual fixed depositors will get in the range of 7% – 7.5% while institutional depositors will get 6.55% – 7.5%. Both rates are lower than the profile maintained for Shrawan. Standard Chartered Bank has lowered its interest rate on savings from 2.5% to 2%. Meanwhile, the interest rates on fixed deposits have been retained without any changes.

Meanwhile, Laxmi Bank, NMB Bank, Machhapuchhre Bank, NIC Asia, Everest Bank, Prime Commercial Bank, Rastriya Banijya Bank, Nepal Bangladesh Bank, Nepal SBI Bank, Siddhartha Bank, Agriculture Development Bank, and Bank of Kathmandu have not made any changes to their respective interest rates profile.

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