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Banks and Financial Institutions Slash Interest on Deposits

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Banks and Financial Institutions Slash Interest on Deposits
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January 15: Banks and financial institutions have slashed the interest rates on deposits for mid-January to mid-February (Magh).

Interest rate notices published by most of the commercial banks for Magh have reduced interest rates to 11 per cent on deposits. 

Commercial banks that were providing interest rate of 12.13 per cent on individual fixed deposits last month (Poush) will give a maximum of 11 per cent interest on such deposit for Magh. 

Nepal Bankers’ Association had decided to cut the interest on deposit on Wednesday. In line with the same decision, commercial banks have revised the interest on deposits. 

In a notice published on Saturday, Global IME Bank has trimmed the interest rate on deposit. As per the revised interest rates, the bank will provide interest from 6.42 to 8.42 per cent on saving accounts. 

Likewise, Nepal Investment Mega Bank will provide a maximum 11 percent interest on individual fixed deposit and 9 per cent on institutional deposits. Similarly, the bank will give 12 per cent interest on remittance account.

Similarly, development banks and finance companies have also lowered interest rates on deposit for Magh.

Development banks will provide a maximum of 12 per interest on individual fixed deposits. Finance companies have also decreased interest rates on deposits. 

Banks and financial institutions can revise interest on deposits on a monthly basis, while they can review interest on lending/credit only after each quarter. 

Easing of the liquidity and pressure from all quarters to slash the interest rate had forced the banks to trim the interest on deposits. 

Liquidity has been easing in the banking system for the past one month, causing the central bank to signal the interest rate drop on deposits. 


 

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