Nepal Rastra Bank Slams Hike in Interest Rate With Addition in Unified Directive; BFIs Forced to Bring Interest Rates Down By Today

Issuing an addition to the unified directive, Nepal Rastra Bank has urged banks and financial institutions (A, B, and C class) to revise their interest rates profile for the month of Kartik.

Banks and financial institutions had unveiled the new interest rates profile for Kartik with a hike in interest rates, the highest of the last three years. This was understood as an indicator that liquidity in the banking economy was being withdrawan, and BFIs were competing to attract more deposits.

In a three-point directive issued on Tuesday evening, NRB said that banks and financial institutions can change the previously published any interest rate by only 10 percent. Similarly, the highest interest rate provided to institutions on fixed deposits should be lesser than that provided to individuals by 1 percentage point.

The central bank has given the ultimatum that requires BFIs to unveil the revised rates on their respective website by today, i.e. Kartik 03. Similarly, the revised interest rates profile should be published in a national newspaper by Kartik 05.