Nepal Rastra Bank (NRB) released guidelines for putting the new policy rate into effect on Wednesday. To discuss how to approach the Central Bank policy, the Bankers' Association, organized a meeting this morning. In a meeting with the chief executives and representatives of all 26 commercial banks, it was decided to keep maintain the current rate.
The interest rate for regular term deposits is 11.03 percent at the moment. The interest that was to be offered to institutions was to be cut by 1%. This resulted in the institution receiving interest at a rate of 10.03 percent, but now the interest rate on institutional deposits will drop to 9.03 percent further after NRB directives.
The banks' deposits are currently steadily declining. The bankers opposes raising the interest rate on deposits since doing so won't result in an increase in bank deposits; rather, it would just raise the cost of operating banks.