माघमा वाणिज्य बैंकहरूको ब्याजदर थप घट्यो, तरलता प्रशस्त हुँदा बैंकहरू दबाबमाCommercial Banks Cut Deposit Interest Rates Further in Magh as Excess Liquidity Pressures Continue

Commercial banks have further reduced deposit interest rates for the month of Magh, reflecting the continued surplus liquidity in Nepal’s banking system. According to the interest rate disclosures published by the banks, 12 out of 20 operating commercial banks have lowered their deposit rates compared to Poush, while seven banks have kept their maximum individual fixed-deposit rates unchanged. Prime Commercial Bank is the only bank that has increased its rate during this period.

In Poush, the maximum interest rate on individual fixed deposits stood at 5.55 percent, but in Magh this has declined to 5.5 percent. Similarly, the average deposit interest rate has dropped from 4.85 percent in Poush to 4.7 percent in Magh, indicating weak credit demand and limited lending opportunities in the market.

Banks Offering Higher and Lower Rates

For Magh, Global IME Bank is offering the highest interest rate, with a maximum of 5.5 percent on individual fixed deposits. Other banks such as Nepal Bank, Rastriya Banijya Bank, NIC Asia Bank, NMB Bank, and Nepal Investment Mega Bank are providing up to 5 percent interest.

On the lower end, Standard Chartered Bank Nepal is offering the lowest rate, with a maximum of only 4.36 percent. Several banks including Agricultural Development Bank, Everest Bank, Laxmi Sunrise Bank, Machhapuchchhre Bank, Kumari Bank, Sanima Bank, and Citizens Bank have also reduced their rates compared to the previous month.

Prime Commercial Bank, however, has increased its individual fixed-deposit rate from 4.25 percent to 4.4 percent, making it the sole bank to raise interest rates for Magh.

Higher Returns on Remittance Accounts

Banks continue to offer around one percent higher interest on remittance-based deposit accounts compared to regular individual fixed deposits. This policy aims to attract foreign remittance inflows and retain them within the formal banking system.

Why Are Interest Rates Falling?

Interest rates have been declining primarily due to the excess availability of loanable funds in the banking sector. Currently, banks have more than NPR 11 trillion in funds available for lending. However, weak credit demand has limited loan disbursement, forcing banks to park excess liquidity with Nepal Rastra Bank (NRB).

Due to sluggish loan growth, banks have been depositing funds with the central bank at interest rates ranging from 2.67 percent to 3 percent. In parallel, NRB has been issuing one-year bonds to absorb excess liquidity from the banking system. As a result, funds parked with NRB have reached approximately NPR 873 billion.

Overall Banking Sector Position

At present, banks and financial institutions have mobilized deposits worth NPR 7.659 trillion, while total credit outstanding stands at NPR 5.728 trillion. The large gap between deposits and loans clearly indicates ample liquidity but subdued economic activity and investment appetite.

The interest rate structure for Magh suggests that depositors are earning lower returns, while banks continue to struggle with deploying excess funds into productive lending. Unless credit demand improves and economic activities gain momentum, a near-term rise in deposit interest rates appears unlikely. A meaningful recovery in private-sector investment and loan growth will be crucial for any upward adjustment in interest rates in the coming months.