The Kathmandu Reference Interest Rate Determination and Recommendation Committee has made the decision on Monday. Along with this, cooperatives will no longer be allowed to charge more than 14.75 percent interest on loans.

The Department of Cooperatives has stated that this arrangement will be implemented from October 30, 2010.

Now, cooperatives will not be allowed to pay more than 8.75 percent interest on savings. The interest gap between loans and savings should be less than 6 percent.

A reference interest rate determination committee has been formed under the coordination of the Registrar of the Department of Cooperatives. The same committee has revised the reference interest rate for the first time. Cooperatives are under pressure to maintain lower interest rates after the NRB set the maximum interest rate limit for microfinance institutions at 15 percent.