April 11: Commercial banks have reached an understanding for a gentleman’s agreement not to increase the interest rates for the month of Baishakh (mid-April to mid-May).

The maximum interest on deposits for the review period will be 11.03 percent, as per the understanding reached between the CEOs of all commercial banks.

A meeting of Nepal Bankers’ Association, an umbrella body of commercial banks, on Sunday took a decision to this effect. The banks did not increase interest rates in the month of Chaitra (mid-March to mid-April) as deposit collection did not improve even after increasing the interest rates.

As per the provision of Nepal Rastra Bank (NRB), commercial banks need to make public the interest rates every month. Stating that the commercial banks were involved in unhealthy competition of increasing the interest rates, the central bank had made arrangements that allowed the banks to increase the interest rate by only 10 percent compared to the previous month.

The commercial banks had increased the interest rate in the month of Falgun (mid-February to mid-March) within the same criteria fixed by the NRB.