The Base Rate of Banks Decreased

The average base rate of commercial banks has declined normally. So far, 11 banks have published Base rates. The average base rate of these banks has come down from 10.16 percent to 10.04 percent. All 11 commercial banks have reduced base rates. Even now the base rate of many banks is above 10 percent. Some have fallen below this. Banks charge interest on loans every month based on the average base rate of the previous three months.

The loan interest rate which is gradually decreasing is going to decrease further in the coming month. Banks have reduced interest rates on deposits in November after the growth rate of banks’ credit investment has slowed down. This reduces the cost of capital and also helps to reduce the interest rate of the loan.

Banks have also reduced the premium rate on the published interest rates for November. Even now most banks charge a maximum of 5 percent.

The maximum premium rate of NIC Asia, Citizens, Everest, National Commerce, Sanima, Nepal SBI Bank is less than 5 percent. NIC Asia Bank has the lowest maximum premium rate (only 3 percent).