KATHMANDU: The banking sector in Nepal witnessed a sharp decline in deposit interest rates throughout the fiscal year 2082 BS.
Commercial banks reduced interest rates on personal and institutional fixed deposits by more than 24 percent on average over the twelve-month period, reflecting high liquidity and shifting economic conditions.
Trends in personal and institutional fixed deposits
In Baisakh 2082, the average interest rate for personal fixed deposits stood at 5.98 percent. However, by the end of Chaitra, this rate dropped to 4.49 percent, marking an average decrease of 1.49 percentage points or a 24.9 percent decline. The institutional side saw an even steeper percentage drop; the average rate fell from 4.41 percent in Baisakh to 3.29 percent in Chaitra, representing a 34.04 percent reduction.
Individual bank performance
NMB Bank and NIC Asia Bank, which offered the highest personal fixed deposit rates at 6.6 percent at the start of the year, adjusted their rates down to 5 percent by year-end. Conversely, banks that initially offered lower rates, such as Himalayan Bank, Nepal SBI, and Nepal Bank, also saw reductions. Himalayan Bank’s rate moved from 5.5 percent to 5 percent, while Nepal SBI dropped to 4.25 percent and Nepal Bank to 4.5 percent.
Institutional adjustments
The trend was mirrored in institutional fixed deposits. NMB and NIC Asia, which led the market with 5.6 percent in Baisakh, lowered their rates to 4 percent by Chaitra. Meanwhile, Nepal Bank and Standard Chartered Bank, which already maintained conservative rates around 3.25 percent at the beginning of the year, further reduced their offerings to 3 percent and 2.75 percent, respectively. This widespread downward adjustment highlights a year where depositors faced diminishing returns on their savings across the commercial banking landscape.
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