The corona virus has caused a worldwide economic downturn. Industries and businesses are closed. Rich countries have slashed bank interest rates to zero percent. During the economic crisis, the head of the US Federal Reserve took special steps to reduce interest rates to zero.

Banks in the UK have also cut interest rates below one per cent. Bank of England interest rates have been cut from 0.75 per cent to 0.25 per cent. This is the lowest ever in the history of the bank.

Corona virus infections have pushed other banks around the world to lower interest rates to around zero. This has also increased the pressure on Nepal's banks.

Commercial banks in Nepal have reduced interest rates on deposits by 1 percent. Commercial banks have reduced interest rates on term deposits, savings and call deposits by one to one and a half percentage points. Banks have fixed the interest rate on one-year personal term deposits at 8.75 percent. The interest rate of institutional depositors will be 8 percent. Earlier, banks had been paying interest of up to 9.5 percent on institutional deposits.

Development banks are set to cut interest rates after commercial banks cut interest rates. Development banks have set interest rates at a maximum of 6.5 percent for savings, a maximum of 9.25 percent for personal deposits and a maximum of 8 percent for institutional deposits.

Similarly, banks have also reduced interest rates on loans by up to 1 percent. However, they have announced a discount of up to 10 percent depending on the nature of the loan. Meanwhile, the Federation of Nepali Chambers of Commerce and Industry (FNCCI), an organization of industrialists, has submitted a demand for a discount with interest on loans of up to three months by banks and financial institutions.

The government has not officially commented on the matter.

Experts in the financial sector have said that a special relief package should be brought by converting the interest of non-performing industries and businesses into loan capital. They are drawing the attention of the concerned sector saying that the industry business can be run as before only if the industry can get discount in interest rate with additional special package after coming into operation. They have presented the view that the country's economy can be saved from the crisis.