Commercial Banks Reduce Interest Rates on Fixed Deposits for Ashar

For the month of Ashar, all commercial banks have reduced their interest rates on fixed deposits. On average, the interest rate on fixed deposits for individuals is set at 6.87% for Ashar, which is a decrease from the average rate of 7% in Jestha. This represents a reduction of 0.14 percentage points on average.

Analysis of Interest Rates Provided by Banks:

Highest Interest Rates:

- Himalayan Bank (HBL): 8.25%

- NMB Bank (NMB): 7.69%

- NIC Asia Bank (NICA): 7.69%

Lowest Interest Rates:

- Agricultural Development Bank (ADBL): 5.66%

- Everest Bank (EBL): 5.75%

- Rastriya Banijya Bank (NBL): 6.75%

Changes in Interest Rates:

- Banks That Increased Rates: Himalayan Bank (HBL) increased by 0.75% compared to the previous quarter.

- Banks That Decreased Rates: Global IME Bank (GBIME) decreased by 1.00%, Laxmi Bank (LSL) by 0.50%, and Sanima Bank (SANIMA) by 0.20%.

Banks That Maintained Rates:

- Standard Chartered Bank (SCB): 7.00%

- Rastriya Banijya Bank (NBL): 6.75%

Conclusion:

The reduction in interest rates is expected to lower the interest rates on loans as well, potentially boosting credit flow and investment expansion. The management of liquidity and resolution of policy obstacles are crucial areas that banks need to focus on.

The primary reason for banks reducing interest rates for the month of Ashar appears to be the excess liquidity in the system and policy obstacles in credit disbursement. As the base rate continues to decrease, it will further reduce loan interest rates, potentially leading to a new direction in the banking sector.