KATHMANDU, March 24: The downward trend in loan interest rates has commenced as banks gradually adjust their rates in response to continuous decreases in deposit interest rates over recent months.

With deposits consistently outpacing loan demand, banks are facing pressure to cut costs, prompting them to offer loans at base rates.

Among the 20 commercial banks currently in operation, both Standard Chartered and Rastriya Banijya Bank have set their base rates below 8 percent for Chaitra (mid-March to mid-April). Specifically, Rastriya Banijya Bank's base rate stands at 7.62 percent, while Standard Chartered Bank's is at 7.52 percent.

However, 12 banks maintain base rates above 9 percent, with Himalayan Bank holding the highest rate. Banks typically determine loan rates by adding a premium percentage to the base rate.

As liquidity accumulates within the financial system due to diminishing loan demand, banks have consistently decreased interest rates on deposits.

Currently, the maximum interest rate on fixed deposits falls below 8 percent, while savings interest rates have declined to 3 percent. The government-owned Agricultural Development Bank has recently lowered its fixed deposit interest rate to 5.66 percent as of March 14, the lowest among commercial banks.

 
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