Commercial banks have reduced their average interest rates for the month of Mangsir (mid-November to mid-December), according to interest rate schedules published by 20 commercial banks. The newly updated rates show a decline compared to those offered in Kartik (mid-October to mid-November).
The maximum average interest rate on individual fixed deposits decreased by 0.16 percentage points, falling from 5.2005 percent in Kartik to 5.0405 percent in Mangsir.
The highest return on individual fixed deposits remains unchanged at 6 percent, a rate offered by Global IME Bank for deposits with a maturity period of three years or longer.
Of the 20 banks, 10 banks lowered their individual fixed deposit rates, while the other 10 banks kept their rates unchanged. This division contributed to the overall decline in the average fixed deposit rate.
Banks that reduced rates
NIC Asia, Prime Commercial, Standard Chartered, Nabil, Siddhartha, Kumari, Sanima, Himalayan, Nepal SBI, and Citizens Bank.
Banks that kept rates unchanged
Agricultural Development Bank, Everest Bank, Nepal Bank, Laxmi Sunrise, Machhapuchchhre, Prabhu Bank, Rastriya Banijya Bank, Global IME, Nepal Investment Mega Bank, and NMB Bank.
Banks generally offer lower rates for short-term fixed deposits and relatively higher rates for long-term deposits, especially those exceeding five years.
A decline in personal fixed deposit rates also typically influences savings and institutional deposit rates, which helps bring down the base rate and can result in cheaper lending for borrowers.
According to Nepal Rastra Bank (NRB), the reduction in interest rates can be attributed to excess loanable funds within the banking system and weak credit demand. The central bank has been managing liquidity by using tools such as deposit collection and the Standing Deposit Facility.
NRB’s current benchmark rates:
- Policy Rate: 4.5%
- Standing Liquidity Facility (SLF) Rate: 6%
- Standing Deposit Collection Facility Rate: 2.75%
