Most commercial banks in the country have kept interest rates on individual fixed deposits unchanged for the month from mid-May to mid-June, reflecting caution amid a complex financial landscape. The average interest rate on individual fixed deposits for Jestha dipped slightly by 0.02 percentage points to 5.95 percent compared to April, while institutional fixed deposits saw a marginal increase of 0.01 percentage to 4.37 percent.

Although credit demand is gradually picking up in recent months, banks, which are sitting on substantial loanable funds, are still grappling with a liquidity crisis. The central bank’s decision to raise Rs 35bn through a 21-day deposit auction to mop up excess liquidity from the banking system on Wednesday shows that the liquidity crisis is showing no signs of easing. Subdued credit demand due to sluggish economic activity has limited opportunities for banks to deploy these funds effectively.

Among 20 commercial banks in the country, Everest Bank, Nepal Bank, Kumari Bank, Siddhartha Bank, Sanima Bank and Nepal Investment Mega Bank (NIMB) have changed their interest rates for Jestha. While Everest Bank, Nepal Bank and Sanima Bank have raised their rates slightly, Kumari Bank, Siddhartha Bank and NIMB have reduced their rates.

Everest Bank has raised individual fixed deposit rates by 0.03 percentage points to 6.64 percent and institutional rates to 5.64 percent. Similarly, Nepal Bank increased individual rates by 0.30 percentage points to 5.45 percent but kept institutional rates unchanged. Sanima Bank revised its individual fixed deposit rates upward by 0.38 percentage points to 6.33 percent and institutional rates by 0.30 percentage points to 4.50 percent.

 Kumari Bank on the other hand trimmed its rates by 0.01 percentage points, setting individual fixed deposits rate at 5.91 percent and institutional deposits rate at 4.91 percent. Siddhartha Bank also cut its rates on fixed deposits by 0.25 percentage points, offering 5.75 percent for individuals and 4.75 percent for institutions. NIMB made the steepest reduction, slashing individual fixed deposit rates by 1 percentage point to 5.5 percent and institutional rates by 0.06 percentage points to 4 percent.

Nepal Bank has kept its institutional fixed deposit rate, but raised its individual fixed deposit rate by 0.30 percentage points to 5.45 percent.