Commercial Banks in Nepal Revise Interest Rates for Bhadra

17th August 2025, Kathmandu

The financial heartbeat of Nepal is once again undergoing a shift, as commercial banks announce their revised interest rates for the month of Bhadra.

Banks Revise Interest Rates

Following a consistent trend from Shrawan, the average interest rates on deposits have seen yet another decline. For Nepalese depositors, this signals a crucial time to re-evaluate their investment strategies and compare bank offerings to maximize their returns. This comprehensive guide breaks down the latest changes, highlights the key players, and provides an in-depth analysis of what these adjustments mean for both depositors and borrowers.

The Downward Trend: A Broader Economic Context

The month of Bhadra has seen the average maximum interest rate on personal fixed deposits fall to 5.57 percent, a notable decrease from 5.69 percent in Shrawan. This is not an isolated event but a continuation of a broader trend. Similarly, the average maximum rate for institutional fixed deposits has also dropped, moving from 4.11 percent to 3.96 percent.

This persistent downward trajectory in deposit rates is a direct reflection of the prevailing economic conditions in Nepal. A stable liquidity position within the banking sector means there is less aggressive competition for funds. When banks have sufficient money to lend, they don’t need to offer high-interest rates to attract new deposits. For depositors, this translates to lower returns on their savings, a reality that necessitates a proactive approach to financial planning.

The Eight Banks Leading the Rate Cut

The majority of commercial banks have aligned with this downward trend. Out of the 20 commercial banks in Nepal, eight have reduced their interest rates on personal fixed deposits. These banks include:

Standard Chartered Bank: With the most significant reduction, its maximum personal fixed deposit rate plummeted from 6.26 percent in Shrawan to a new low of 5.13 percent in Bhadra, a sharp decline of 1.13 percentage points.

Laxmi Sunrise Bank: This bank has set its maximum personal fixed deposit rate at 5 percent, making it the least rewarding option for depositors in the current market.

• Everest Bank
• Sanima Bank
• Kumari Bank
• Siddhartha Bank
• Agricultural Development Bank
• Nepal SBI Bank

These changes are a clear indication of the collective effort by these institutions to manage their deposit costs in line with the current economic climate and demand for loans.

Prabhu Bank’s Bold Counter-Move

While the market is trending downwards, one bank has chosen to go against the current. Prabhu Bank, which had been offering the lowest personal fixed deposit rate in Shrawan, has surprisingly increased its maximum rate by a substantial 1.1 percentage points. This brings its new rate to 5.35 percent.

This move by Prabhu Bank is a strategic one, aimed at attracting a greater share of the deposit market. By offering a more competitive rate than its previous low, it positions itself as an attractive alternative for depositors who are looking for better returns than what many of its competitors are offering. Although its new rate is still below the sector’s highest offers, this bold decision could signal a new phase of competition in the market, especially for individual depositors.

The Best and The Lowest: Where to Deposit Your Funds

In a market defined by falling rates, identifying the highest and lowest offerings is critical for depositors.

NIC Asia Bank continues its reign at the top, maintaining its maximum personal fixed deposit rate at 6.25 percent. This consistency makes it the most appealing option for individuals seeking the highest possible return on their savings.

Laxmi Sunrise Bank, at the other end of the spectrum, has a maximum rate of just 5 percent, placing it at the bottom of the list for personal fixed depositors.

For institutional fixed deposits, the trend is even more pronounced. Seven commercial banks have reduced their maximum rates, and not a single bank has increased them. The average institutional rate has dropped by 0.15 percentage points, highlighting that even large-scale depositors are facing lower returns.

Implications for the Nepalese Economy

The falling interest rates have dual implications for Nepal’s economy, affecting both depositors and borrowers.

For Depositors: The continued decline in rates means reduced earnings on savings, particularly for those who rely on fixed deposits as a primary investment tool. With lower returns, risk-averse investors will need to consider alternative avenues or adjust their financial expectations.

For Borrowers: This is the silver lining. A decrease in deposit costs for banks could, in theory, lead to more favorable lending rates. If banks pass on these savings, borrowers could benefit from lower interest rates on loans for housing, business expansion, and consumer spending. This could stimulate economic activity and provide a much-needed boost to various sectors.

Conclusion: A Dynamic Market Requires Careful Consideration

The month of Bhadra underscores a dynamic and evolving financial landscape in Nepal. The general reduction in deposit rates across most commercial banks reflects a comfortable liquidity position, which is a positive sign for the stability of the banking sector. However, this comes at the cost of lower returns for depositors.

As the market continues to shift, it is more important than ever for individuals and institutions to stay informed and compare interest rates carefully. While NIC Asia Bank remains the frontrunner for high returns and Laxmi Sunrise Bank offers the lowest, the interesting move by Prabhu Bank shows that some institutions are ready to challenge the status quo. For anyone looking to secure their financial future in Nepal, the key takeaway is clear: do your research, compare your options, and choose a bank that aligns with your financial goals in this ever-changing interest rate environment.

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