November 16: At a time when industrialists are protesting against the hike in interest rate on lending by banks and financial institutions, development banks and finance companies have decreased the interest rate on deposits. Citing slight improvement in state of liquidity and ease in credit-deposit ratio, development banks and finance companies took the decision to cut the interest on deposits. Meanwhile, commercial banks have decided to keep the current interest rates stable for the next month as well.

Development Bankers Association Nepal has decided to slash the interest on deposits by 0.15 per cent for a month starting from mid-November till mid-December. As of mid-November, development banks were providing up to 13 per cent interest on fixed deposits. They have set the maximum interest on fixed deposits at 12.85 per cent for the next one month period. Likewise, they have reduced the maximum interest on savings from 10 per cent to 9.85 percent for the next one month period.

Chairman of Development Bankers Association Nepal and Muktinath Bikash Bank’s Chief Executive Officer Pradyuman Pokhrel said that they had decided to lower the interest on deposits as the credit-deposit ratio had eased of late.

Chairman of Nepal Financial Institutions Association, Saroj Kaji Tuladhar, informed that the association has decided to decrease the interest on deposits by 0.20 per cent for the next month. Finance companies were providing a maximum of 13.20 per cent interest on three-month fixed deposits and 13.45 per cent on one-year fixed deposits. The association has set the interest on three-month fixed deposits at 13 per cent and 13.30 per cent for one-year fixed deposits for the next month.

Meanwhile, commercial banks have decided to keep the interest rate unchanged for the next month. Nepal Bankers Association Chairman Anil Kumar Upadhayay said that they have decided to keep the interest rate stable as frequent changing of it would have negative impact.

“Nepal Bankers Association will take further decision keeping in view of post-election scenario and Nepal Rastra Bank’s review on monetary policy of the first quarter,” Upadhayay added.

Banks had been providing interest rate on individual fixed deposits at 12.33 per cent in the Nepali month of Kartik (mid-October to mid-November ). The same interest rate will come into effect for the next one-month period as well.