Interest rates on fixed deposits have once again declined in Nepal as banks adjust to the new monetary policy announced by the Nepal Rastra Bank (NRB). The NRB recently reduced the policy rate from 5% to 4.5%, prompting commercial banks to revise their deposit interest rates for the month of Shrawan.
According to the latest update, 14 banks have lowered the maximum interest rate on personal fixed deposits, 4 banks kept it unchanged, and 2 banks slightly increased it.
📉 Why Are Interest Rates Falling?
The central bank also cut the Standing Liquidity Facility (SLF) rate from 6.5% to 6%, and the Standing Deposit Facility (SDF) rate from 3% to 2.75%. These decisions have directly influenced the banks to reduce interest rates.
Moreover, as capital expenditure peaks in Asar, liquidity in the market has increased. Banks are struggling to issue enough loans, which has led to surplus liquidity.
As of the end of Asar 2081, the NRB has absorbed Rs. 692.65 billion in excess liquidity from the financial system.
🏦 How Much Have Interest Rates Changed?
The average maximum personal fixed deposit rate in Shrawan has decreased by 0.215 percentage points, going from 5.902% in Asar to 5.687% in Shrawan.
📊 Comparison of Interest Rates: Asar vs. Shrawan
| Bank | Asar Rate (%) | Shrawan Rate (%) |
|---|---|---|
| Agricultural Development | 5.45 | 5.40 |
| Everest | 6.55 | 6.25 |
| Nepal Bank | 5.45 | 5.40 |
| Laxmi Sunrise | 5.75 | 5.50 |
| Machhapuchchhre | 6.00 | 6.00 |
| NIC Asia | 6.55 | 6.25 |
| Prabhu | 6.10 | 4.25 |
| Standard Chartered | 6.25 | 6.26 |
| Rastriya Banijya | 6.00 | 5.50 |
| Nabil | 5.75 | 5.50 |
| Global IME | 6.00 | 6.00 |
| Siddhartha | 5.75 | 5.75 |
| Prime Commercial | 6.25 | 6.00 |
| Kumari | 5.71 | 5.41 |
| Sanima | 6.33 | 6.18 |
| Himalayan | 5.50 | 6.00 |
| Nepal SBI | 5.50 | 5.35 |
| Investment Mega | 5.50 | 5.25 |
| NMB | 6.00 | 6.00 |
| Citizens | 5.65 | 5.50 |
Notably, Himalayan Bank raised its rate by 0.5%, and Standard Chartered made a minor increase of 0.01%.
💬 Expert Opinion
Nabil Bank CEO Manoj Gyawali stated:
“After the policy changes, banks earn less from parking liquidity at NRB, pushing them to lower deposit rates further.”
The NRB has currently parked over Rs. 692 billion in excess liquidity using deposit collection tools and standing deposit facilities. The amount is almost double compared to last fiscal year, signaling continued low credit demand.
