Kathmandu. Nepal Bankers Association (NBA), the umbrella organization of chief executive officers of commercial banks, has decided to reduce the interest rate of institutional depositors. The union meeting held on Monday decided to reduce the interest rate of institutional depositors.

Anil Kumar Upadhyay, President of Nepal Bankers Association, said that it has been decided to reduce the interest on institutional deposits. According to him, the interest rate of ordinary and fixed deposits has remained the same. It has been decided to maintain the current maximum interest rate of 11.03 percent for individual term deposits, while for institutional term deposits, it has been decided to reduce it by one percent and maintain the maximum interest rate of 9.03 percent.

At present, banks have fixed the maximum interest rate of 11.03 percent for personal term deposits, while they are giving 10.03 percent interest for institutional deposits. However, now the interest rate of institutional depositors is going to decrease while the interest rate of individuals remains the same.

Nepal Rastra Bank tightened the interest rate of institutional depositors through the monetary policy of Nepal Rastra Bank for the current financial year. According to Rashtra Bank, the maximum interest rate offered on institutional term deposits (including cash deposits) should be at least two percentage points lower than the maximum interest rate offered on term deposits for general public.

Similarly, it is said that development banks and finance companies have also decided not to increase the interest rate in the month of August. That is why many people expected that the interest rate may increase. Bankers have decided not to increase the interest rate even after increasing the interest rate.