Most of commercial banks decrease base rate

ShareSansar, November 21:

As the commercial banks have been slashing their interest rate, it has also led to the decrease of their base rate due to less capital cost.

Except Global IME, Nepal Credit and Commerce, NMB, Bank of Kathmandu, Nepal SBI and Rastriya Banijya Bank, the base rate of all of the 31 commercial banks have deceased.

The commercial banks have publicized their base rates four times after Nepal Rastra Bank enforced a provision for the base rate last year.

The commercial banks with high base rate charge higher interest on loan as the banks fix their base rate after deducting all their expenses and including a portion of their profit.

Loan seekers can bargain with the banks after reviewing their base rate.

The central bank had introduced the provision for base rate to make the process of fixing interest rate transparent, so that general people get a good deal.

The central bank has already directed the development banks and finance companies to implement base rate from next month.

As the development banks and finance companies have higher cost of capital, their base rates will higher than that of the commercial banks.