Kathmandu. Even as banks try to keep deposit interest rates stable for the next few months, interest rates on loans are set to rise by at least one percent. Banks' costs have risen after interest rates on deposits rose last October and November. Based on the increase in costs, the banks have said that the base rate will increase in mid-December and that will also increase the interest rate on loans.

Although banks did not raise interest rates on deposits in December, they have increased in November and November. Former president of the Bankers' Association Bhuvan Dahal has said that the interest rate on loans will increase by at least 1 percentage point from next January as it will increase the base rate. ‘

Dahal also said that the interest rate on loans will go up from single digits after January. ‘The interest rate on new loans flowing by banks today should be in double digits. Now it is getting higher and higher, 'he added.

As per the NRB directive, banks and financial institutions should calculate the base rate every three months. Thus, according to the quarterly change in the base rate, the interest rate of the loan (new and old) should also be modified. In the current fiscal year, the banks had calculated the base rate last September. Now they recalculate in Pus. As the interest rate on deposits increased last October and November, the base rate will definitely increase in December. As the base rate rises, banks also raise interest rates on loans. That is why the interest rate on loans will increase by about one percent from January, said Sunil KC, vice-president of the Bakers' Association.