NIC Asia controversy: Bank backtracks on interest rate, association lifts sanctions

Kathmandu, March 13

Nepal’s bankers’ association and NIC Asia Bank have reached an agreement to lower interest rates on fixed deposits, three days after NBA members decided not to carry out inter-bank transactions with NIC Asia.

The association had said that NIC Asia indulged in an unfair practice by hiking interest rate above what was agreed among members of the association. Following the decision, NIC Asia could neither borrow from or lend to any of the 27 major banks in the country.

An agreement to end the sanctions was reached following a meeting between officials from the association and NIC Asia on Monday evening and shall be implemented from Friday. According to sources, NRB officials mediated in the meeting.

NIC Asia, last week had announced that it would provide 12 per cent interest on fixed deposits–one percentage point above the ceiling fixed by the association. The bank said interest rates should be determined based on the market dynamics and bankers should not tamper with it.

“NIC Asia will now offer 8 per cent interest on saving and 10 per cent on fixed deposits,” the bank said in a statement.

Published on March 13th, Tuesday, 2018 12:57 PM

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