Kathmandu- In a move towards increased competition, commercial banks have gained the autonomy to determine their own interest rates on deposits.

In June, it was observed that the maximum interest rate among all commercial banks stood at 9.99 percent. Notably, 18 commercial banks recently issued notifications indicating interest rates for personal term deposits ranging from 8.95 to 10.98 percent. NMB, Prime, Nabil, and Kumari Bank emerged with increased interest rates, offering a range of 10.01 to 10.98 percent.

On the other hand, Global IME, Lakshmi, Sunrise, Himalayan, Nepal SBI, and Citizens Bank have maintained fixed interest rates at 9.99 percent. Additionally, nine banks have set their interest rates for personal term deposits between 8.95 and 9.52 percent.

Under the current framework, It is stipulated that any changes made by commercial banks should not exceed 10 percent of the average interest rate provided by all banks in the previous month. Banks are keen for this provision to be removed from the monetary policy, seeking greater flexibility in determining interest rates.

Furthermore, interest rates on ordinary savings accounts offered by banks have also shown variation. Regulations permit a maximum reduction of 5 percent in ordinary savings rates compared to term interest rates. The range of interest rates on ordinary savings, excluding remittance accounts, currently spans from 4.84 percent to 8 percent.

Banks are navigating this new landscape of freedom in setting interest rates, creating a dynamic environment where customers may benefit from diverse options.