Kathmandu. To alleviate the liquidity crunch, commercial banks have raised interest rates for the month of February. Banks that have been facing liquidity problems for a long time have now stopped collecting deposits in such a way that the Nepal Bankers' Association sets the interest rate to raise the amount to be invested.

On the last day of January, commercial banks have announced new interest rates for February. As per the public interest rate, the maximum interest rate of these banks has reached 11.03 percent.

Banks had hiked interest rates in November and December to raise deposits as the liquidity crisis intensified. Banks had set a maximum interest rate of 10.5 percent for November, while Development Bank had set 10.5 percent and Finance 10.35 percent. The new interest rate will be fixed in January.

All the banks that have announced new interest rates will be offering interest rates on personal term deposits at the same rate. As per the NRB directive, banks and financial institutions should calculate the base rate every quarter. When calculating in this way, the interest rate of the loan should also be reduced according to the change in the base rate. The average base rate of commercial banks stood at 8.40 percent in mid-December. Last September, the rate was 7.53 percent. Compared to mid-January of the last fiscal year, such rate has increased by 1.20 percentage points.