Nepal Bankers’ Association (NBA) has decided to reduce the interest rate.
A meeting of the Association held on Thursday took a decision to reduce interest rate by 0.4 percent on ordinary deposits.
Similarly, the interest rate on the loan premium will be slashed by 1 percent. This decision will take effect from March 15.
Financial institutions have decided to add a maximum of 5% to the base rate by adding a premium of up to 6%.
The base rate has increased by 29 percent compared to the average base rate of the Nepali month Poush (mid- December to mid-January) last year. In Poush last year, the average base rate of the bank was 8.42 percent.
For the time being, it has been decided to reduce the premium to give relief to small borrowers.
Similarly, the Association said, it decided to reduce the interest rate of total deposits by 10 percent and the interest rate of savings by 0.42 percentage points. This means that the interest rate on savings will be between 6 to 8 percent.
Savings accounts for 26 percent of total deposits with banks.
The decision to reduce the interest rate on savings reduces the base rate of banks and the interest rate of loans.
On the fixed deposit, the interest rate will remain unchanged, according to the Association.
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