Kathmandu. The Nepal Bankers Association, an umbrella organization of commercial banks, has decided to raise interest rates with effect from February 1. The association's working committee meeting held on Friday has decided to increase the interest rate.

It has been decided to increase the time limit to 11.03 percent for individual and 10.3 percent for institutional. The association has decided to increase the savings account to 5 percent and call to 3.015 percent.

After the working committee meeting, the association has instructed its members to implement the decision accordingly. Banks will offer 12 percent interest rate on remittance accounts. The interest rate on personal deposits was 10.03 percent in January.

The bankers' association president, who is also the CEO of the Agriculture Development Bank, has succeeded in deciding to increase the interest rate saying that it was Governor Maha Prasad Adhikari who requested for the increase. Despite opposition from most CEOs, the union has decided to raise interest rates.

In previous practice, the Bankers' Association used to hold a full meeting to make such decisions. All CEOs were invited to the full meeting. Out of the CEOs of all the 27 banks, 18/20 CEOs of the banks had the same decision. However, this time the CEOs were not informed about such an important decision.