Kathmandu. Nepal Rastra Bank has reduced the spread rate of banks. In the first quarter review of the monetary policy of the current fiscal year 2079/80 published by the Nepal Rastra Bank, it has been promised that the interest rates of banks and financial institutions will not increase further.

Rastra Bank spokesperson Dr. Gunakar Bhatt announced the monetary policy and said that liquidity will be provided to banks and financial institutions so that the interest rate does not increase further.

According to Rashtra Bank, the average interest rate difference of commercial banks should be maintained from 4.4 percent to 4 percent.

Similarly, the average interest rate difference between development banks and finance companies will be maintained from 5 percent to 4.6 percent, according to the Rastra Bank. Rashtra Bank expects that the premium rate charged by banks and financial institutions while setting the loan interest rate will decrease and balance the loan interest rate as well.

According to the National Bank, the monetary instruments provided in the monetary policy 2079-80 have been continued. According to the National Bank, the mandatory cash ratio has been kept at 4 percent and the bank rate at 8.5 percent.

According to the National Bank, the liquidity will be managed in such a way as not to cause any disruption in the payment system, to support the reflected credit flow and not to increase the interest rate immediately.

Similarly, if the specified loan-deposit ratio is not reached, the fine imposed on banks and financial institutions will be reviewed based on the liquidity risk, and in view of the pressure on liquidity, if the banks and financial institutions do not provide loans in the specified areas, a provision will be made to calculate damages from June 2080 on the basis of mid-June 2080. 

According to the National Bank, during the review period, banks and financial institutions provide loans of up to 2 million rupees for food production, livestock, fisheries, export and 100% domestic raw material-based manufacturing industries, handicrafts and skill-based businesses and enterprise business operations. In addition, the provision to determine the interest rate has been implemented.

Similarly, the Rastra Bank has implemented a provision to determine the interest rate by adding a maximum of 2 percentage points to the base rate when providing loans to the private sector for the construction of information technology parks and industrial parks.

According to the Rastra Bank, during the review period, when banks and financial institutions provide wholesale loans to microfinance financial institutions under the category of underprivileged loans, they have to add a premium of only 2 percentage points to the base rate and determine the interest rate.