Kathmandu. As the interest rate of commercial bank deposits will be up to 10.89 percent maximum, the development banks, forced to save their deposits, will finally increase the interest rate for August. The working committee meeting of Development Bankers Association (DIBAN) has decided to raise the maximum interest rate of deposits to 11.15 percent with effect from 1st August.

"We had to take this decision after receiving information that the deposit interest rate of some of the commercial banks will increase to 10.89 percent." An official of Diban said, "In order to protect our deposits, development banks will publish a new rate by maintaining the maximum deposit interest rate of 11.15 percent."

Development banks will be allowed to offer interest rates up to 11.15 percent on term deposits of one year or more. Development banks have agreed to maintain the maximum interest rate of 11.05 percent for term deposits of less than one year. Similarly, the interest rate for institutional term deposits of one year or more has been fixed at 9.15 percent, while for less than one year, the interest rate has been fixed at 9.05 percent.

Development banks have agreed to maintain the minimum interest rate on savings at 6.15 percent. Diban has also provided the facility for development banks at the regional and provincial levels to increase the maximum rate by 0.25 basis points and publish the interest rate.