Kathmandu: In response to a surplus of liquidity and a lack of loan investments, Nepalese banks, including Kumari Bank and NIC Asia Bank, have announced a reduction in interest rates effective from the 1st of Magh.

Kumari Bank, having offered a maximum interest rate of 9.012 percent in Poush, is lowering it to 8.11 percent from Magh. This reduced rate applies specifically to deposits held for one year or more. For shorter periods, the bank will offer interest rates ranging from 6.5 to 7.25 percent. The bank’s base rate for Mangsir is currently at 10.66 percent, and it aims to further decrease this rate.

Meanwhile, NIC Asia Bank is strategically reducing its interest rates, bringing them down from 8.67 percent to 8.065 percent. Different interest rates are now applicable based on deposit periods, ranging from 7.75 percent for two years to 7.25 percent for one year. The bank has set a minimum interest rate of 6.25 percent on fixed deposits, with savings earning an interest of 3.98 percent. The base rate for NIC Asia Bank stands at 10.39 percent.

These moves by the banks are driven by their efforts to address the surplus liquidity in the market and stimulate loan demand by aggressively reducing interest rates.