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In a clear indication of liquidity surplus in the banking system, most commercial banks have reduced interest rates on deposits for the month of Kartik, which begins on Wednesday.

As banks are flush with loanable funds, interbank lending rates have fallen below two percent. Taking advantage of these low rates and to absorb liquidity in the banking system, the government has increased domestic borrowing. It has already raised the debt it had targeted to raise in the second quarter.

The government has set a target of raising Rs 240bn internal domestic debt in the current fiscal year. Out of this amount, the central bank has already secured Rs 87.31bn. This includes Rs 35bn that the central bank had initially planned to raise in the second quarter, according to the Monetary Management Department of the NRB.

Out of the 20 commercial banks in operation, 13 have reduced interest rates on individual fixed deposits, while four have maintained the same interest rates as the previous month. Meanwhile, three have increased their interest rates.

Nepal SBI Bank, NMB Bank, and NIC Asia have raised interest rates on deposits due to pressure on their credit-deposit ratios.

Himalayan Bank, NIC Asia Bank, and NMB Bank will offer the highest interest rate of 11.003 percent on individual fixed deposits. In Ashwin, from mid-September to mid-October, Himalayan offered an interest rate of 11.054 percent, while NIC Asia and NMB Bank offered 10.896 percent and 9.99 percent, respectively.

On the other hand, Standard Chartered Bank will offer the lowest interest rate at 9.22 percent on individual fixed deposits. Likewise, Everest Bank, Prabhu Bank, Sanima Bank, and Nepal Bank Ltd will offer an interest rate of 9.224 percent, while Rastriya Banijya Bank Ltd will offer 9.5 percent, Agricultural Development Bank will offer 9.76 percent, and Citizens Bank Ltd will offer 9.95 percent interest on individual fixed deposits.

Similarly, Siddhartha Bank Ltd and Machhapuchchhre are maintaining the same interest rates as last month, which is 9.99 percent.

Nepal Rastra Bank (NRB) allows banks and financial institutions to adjust their interest rates by a maximum of 10 percent each month.

Similarly, interest rate on institutional fixed deposits should be two percentage points lower than interest rate on individual fixed deposits.

The Nepal Stock Exchange (NEPSE) gained 43.27 points to close at 1,907.89 points on Wednesday.

Similarly, the sensitive index surged by 8.14 points to close at 366. 97 points.

A total of 3,772,023-unit shares of 286 companies were traded for Rs 934 billion.

Meanwhile, Asha Laghubitta Bittiya Sanstha Ltd was the top gainer today, with its price surging by 10. 00 percent. Similarly, BPW Laghubitta Bittiya Sanstha Limited was the top loser as its price fell by 4.62 percent.

At the end of the day, total market capitalization stood at Rs 2. 92 trillion.

The price of gold has increased by Rs 1,300 per tola in the domestic market on Wednesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 113, 200 per tola today. It was traded at Rs 111, 900 per tola on Tuesday.

Meanwhile, tejabi gold is being traded at Rs 112, 650 per tola. It was traded at Rs 111, 350 per tola.

Similarly, the silver is being traded at Rs 1,375 per tola today.  

The much-talked-about initial public offering (IPO) of companies through the book building mechanism has been completed. Mukti Nath Shrestha, spokesperson at the Securities Board of Nepal (Sebon), said, “This process, following extensive efforts from Sebon and other stakeholders, has achieved a significant breakthrough.” He described the development as “historic”.

Book building is the process by which an underwriter attempts to determine the price at which the IPO of a company is offered. An underwriter, usually an investment bank, builds a book by inviting institutional investors (such as fund managers and others) to submit bids for the number of shares and the price(s) they would be willing to pay for them.

Sarbottam Cement received permission to issue IPOs through book building at a cutoff price of Rs 401 per share on Oct 16. Previously, Sarbottam had set a maximum price of Rs 751.50 per share.

Sebon Chairperson Ramesh Hamal stated, “Book building serves as a means of price discovery, promoting equitable issuance of IPOs with extensive involvement from institutional investors and significant buyers.” He added that it also enables companies going public to secure considerable capital and collect pricing insights from prospective buyers. “Employing the book building approach for IPOs will improve the transparency, governance and accountability of share prices.”

According to Hamal, the commencement of the book building process will encourage many investors and companies, previously hesitant to issue an IPO, to consider doing so. “It will aid in enhancing national revenue contribution and contribute to the overall national economy.”