Conflict between NIC Asia Bank and Banker’s Association only to impact lending between banks; Day to day banking transaction of customers to remain unaffected

There has been an ongoing battle among the banker’s association and NIC Asia Bank. The association has decided not to conduct any kind of inter-banking transactions with NIC Asia. This issue first came into occurrence when the Banker’s Association had tried to fix the interest rate for all the 28 commercial banks of the country. The association had then decided to suspend any kind of inter-banking transaction with NIC Asia Bank after the bank broke the term of gentleman’s agreement and hiked its interest rate at 10% for savings and 12% at fixed deposits. Inter-banking transaction means the transaction that is conducted between two banks. It does not involve the transaction of the customers with the banks. The transactions like foreign exchange, lending between banks and such which involve two banks are inter-banking transaction. Hence, the customers of NIC Asia need not panic about not being able to perform any kind of transaction between other banks. The customers of NIC Asia have been in a state of doubt after the decision of the association. There have been reports of lots of problems that the customers are facing. It is reported that some banks are not exchanging the account payee cheque of NIC Asia Bank and the same has been followed by the employees of NIC Asia as well. But as per the sources, the banks are not allowed to follow any such kind of practices i.e. the 27 commercial banks as well as NIC Asia needs to perform the regular transaction. Nepal Rastra Bank prohibits any kind of malpractices which may hamper the interest of individual customers. The sources also reveal that, if any banks or financial institution are found involving in such practices affecting the customers, Nepal Rastra Bank may take necessary action against such banks.