Base Rates of Banks Declining: Possibility of Lower Loan Interest Rates

In the month of Bhadra, the average base rate of commercial banks has decreased by 0.25% compared to the month of Shrawan, indicating a potential drop in loan interest rates. The average base rate for Bhadra stands at 7.92%. A decrease in the base rate suggests that the interest rates on loans provided by banks could also become cheaper.

Key Points:

Decline in Base Rates:

• The average base rate for Bhadra is 7.92%, which is 0.25% lower than in Shrawan.

Banks with the Lowest Base Rates:

• Standard Chartered Bank: 6.22% (Lowest)

• Rastriya Banijya Bank: 6.66%

• Everest Bank: 7.29%

Banks with the Highest Base Rates:

• NIC Asia Bank: 9.22% (Highest)

• Kumari Bank: 8.90%

• Prime Commercial Bank: 8.57%

Advantages of Low Base Rates:

• Taking loans from banks with lower base rates results in lower interest rates, providing financial benefits to borrowers.

Role of Spread Rate:

• Nepal Rastra Bank has set a maximum spread rate limit of 4%. A lower spread rate results in a lower loan interest rate.

• For Bhadra, maintaining a maximum spread rate of 4% means the loan interest rate would be only 10.46%, which is relatively low.

Comparison of Base Rates Among Banks:

• Out of 20 commercial banks, Standard Chartered Bank has the lowest base rate at 6.22%.

• NIC Asia Bank has the highest base rate at 9.22%.

List of Base Rates for Banks:

• Rastriya Banijya Bank: 6.66% (Bhadra), 7.01% (Shrawan)

• Agricultural Development Bank: 7.96% (Bhadra), 8.18% (Shrawan)

• Nabil Bank: 7.42% (Bhadra), 7.62% (Shrawan)

• Everest Bank: 7.29% (Bhadra), 7.45% (Shrawan)

• NIC Asia Bank: 9.22% (Bhadra), 9.24% (Shrawan)

• Additional details for other banks are included in the above information.

Conclusion:

The decline in base rates for banks indicates a potential reduction in loan interest rates, which could benefit borrowers. Loans from banks with lower base rates, such as Standard Chartered Bank and Rastriya Banijya Bank, may become cheaper. On the other hand, loans from NIC Asia Bank and Kumari Bank may be more expensive due to their higher base rates.