KATHMANDU: Commercial banks have further reduced their deposit interest rates for the upcoming month (July 17 – August 16, 2026) due to low loan demand and massive excess liquidity.

Throughout the fiscal year 2025/26, deposits surged by approximately Rs 1,000 billion while credit expanded by only Rs 400 billion, forcing banks to park over Rs 1,320 billion in excess funds with Nepal Rastra Bank.

To lower their cost of funds, six major banks—including NMB, Kumari, Standard Chartered, Citizens, Global IME, and Rastriya Banijya Bank—slashed their interest rates, while 14 others kept them unchanged.

Since the central bank’s monetary policy prevents banks from lowering savings rates below the 2.75% policy floor, lenders aggressively targeted individual fixed deposit rates to minimize costs.

This adjustment pulled the average maximum individual fixed deposit rate down from 4.26% to 4.17%, with several banks now offering maximum fixed deposit rates below 4% for the July 17 to August 16 period.