Kathmandu. Bankers have expressed concern that interest rates could rise to 15 percent as commercial banks compete to raise interest rates on deposits to match the loan-to-deposit ratio (CD ratio).

Last month, Sunrise Bank published a notice offering 10.07 percent interest on time deposits. Sunrise Bank had the highest interest rate in September.

Himalayan Bank has published the information that the interest rate for the month of November will be up to 11.67 percent if the institutional depositors participate in the deposit auction competition. Himalayan Bank has the highest interest rate for the month of November.

Similarly, NIC Asia Bank has also announced to increase interest rates to 11.1 percent on term deposits. Lakshmi Bank has also published a notice to pay interest rate above 11 percent on time.

Bankers have expressed concern over the competition in interest rates. According to Bhuwan Dahal, chairman of the Nepal Bankers' Association and chief executive officer of Sanima Bank, the interest rate on deposits will reach 15 percent in a few months if there is competition to raise interest rates. 

At present, the CD ratio of the banking sector is around 89 percent, the CD ratio of some banks has reached above 90 percent.