Nepali commercial banks have decided not to increase interest rates for next one month citing the current situation in the country’s financial market and soaring inflation.
According to the Nepal Bankers’ Association (NBA), a meeting of bankers held on Tuesday decided not to raise the interest rates.
Since mid-September, they have increased their interest rates on fixed deposits by 10 percent to 12.13 percent, while the interest rates on savings accounts is 7.13 percent per annum on an average. It has triggered the lending rate to up to 18 percent a year.
However, they have declined to raise interest rates this time, also citing that they failed to collect more deposits despite offering high-interest rates. Recently, banks also faced a notable rise in their nonperforming loans due to the surge in interest rates of loans, while the cases of bad debts are also increasing.
The private sector has also been criticizing the banks for increasing the interest rates excessively. They have postponed their protests against the banks’ move citing the upcoming elections to the House of Representatives and provincial assemblies.
