NRB directs banks to refrain from promotional activities to bring in deposits

Nepal Rastra Bank (NRB), the regulatory body of BFIs, issued a notice on Thursday directing banks to refrain from promotional activities to attract deposits. The direction is for Class A, B and C vis-a-vis commercial banks, development banks, and finance companies.

Post the liquidity shortage banks have been trying their best to bring in more deposits. This had led to high-interest rates, but that was subsided by Gentleman's agreement and when that agreement didn't work NRB had intervened. As the interest rates are now similar for most banks, they had introduced new products with added benefits and various free services. Now the banks are directed to refrain from activities such as offering gold and silver coins and so on.