Kathmandu. The base rate of commercial banks has started to decrease continuously. Even in the month of May, the base rate of banks has decreased by 0.22 percentage points. At present, the base rate of banks has reached 7 percentage points. In the month of May, the base rate of all 20 banks is in single digits. At present, the average base rate of banks has been maintained at 8.53 percent.

With the accumulation of more liquidity in the banking system, the interest rate is also continuously decreasing. As the interest rate of deposits has decreased, the cost of banks has also decreased. The base rate of banks has decreased due to cost reduction. Along with the base rate, the loan interest rate has also decreased. When the base rate increases, the loan interest rate also increases, while if the base rate decreases, the loan interest rate also decreases.

Standard Chartered Bank has the lowest base rate in May. Currently, the base rate of the bank is 7.01 percent. Similarly, the base rate of National Commercial Bank, Everest, Nepal Bank is also below 8 percent. The base rate of these banks is 7.35 percent, 7.48 percent and 7.85 percent respectively in May.

According to the base rate of the banks, it indicates that the loan interest will be cheaper and more expensive. Taking a loan from a bank with a low base rate will result in cheaper interest. However, there is a difference depending on the nature of the bank and the loan. At present, banks charge a premium of 1.5 percent to 5 percent on the base rate depending on the nature of the loan