What is base rate?
“Base rate”, as defined by Nepal Rastra Bank, includes all cost of funds, cost of liquidity (CRR and SLR), cost of operation and return on their assets which is minimum 0.75% of total assets. This is the minimum rate banks have to charge to their customers remain in profit. NRB has directed the banks to tie their lending rates up with base rates when publishing the interest rates.
What happens if base rate of commercial bank rises?
If there is a shortage of liquidity in the market, then the banks will be forced to offer high interest rate to its depositors for attracting deposits in turn this will increases bank overall cost of fund and base rate. If the base rate rises then the interest rate on loans also rises.
What happens if base rate of commercial bank falls?
With the ease of liquidity position in the market, the banks offer reasonable or low interest rate to its depositors. This will help banks to lower its cost of fund and base rate. Bank can offer loans at low interest rate when they have low or declining base rate.
Latest Base Rate of Commercial Bank:
Several commercial banks are revising their interest rates from kartik, 2074. Many banks have published new revised interest rates on loans that are being implemented from Kartik, 2074.
|
Base Rate |
Month |
Base Rate |
Month |
| Nabil Bank |
6.69% |
Ashwin End, 2074 |
7.03% |
Shrawan End, 2074 |
| Everest Bank |
7.91% |
Ashwin End, 2074 |
8.05% |
Bhadra End, 2074 |
| Nepal SBI Bank |
9.32% |
Ashwin End, 2074 |
9.50% |
Bhadra End, 2074 |
| Sunrise Bank |
10.82% |
Ashwin End, 2074 |
11.88% |
Ashad End, 2074 |
| Global IME Bank |
10.54% |
Ashwin End, 2074 |
11.07% |
Bhadra End, 2074 |
| Mega Bank |
10.72% |
Ashwin End, 2074 |
11.28% |
Bhadra End, 2074 |
The above table clearly shows that the liquidity problem banks are facing since last 6-8 months are easing now and slowly the base rate is declining. As the base rate is declining continuously for the past few months, now the banks can offer loan at low interest rate.
The Federal Level and Central Level elections are yet to be held and government spending (capital expenditure) will increases in coming month, liquidity is expected to increase in coming months too which will results lower base rate for commercial banks.
