Those still paying no heed to the guidelines even over two months later include the large public sector banks Rastriya Banijya Bank (RBB) and Agricultural Development Bank Ltd (ADBL). The list also includes private sector players like Nabil, Everest Bank, Nepal SBI and NIC Bank. [break]
Bank of Kathmandu, Laxmi Bank, NMB Bank, Siddhartha Bank, Global Bank, Nepal Credit and Commerce (NCC) Bank, Prime Commercial Bank and Ace Development Bank also still operate with more than 2 percent interest rate gap between different savings accounts.
That is not all. Some banks have not bothered to publicly disclose the interest rates they provide to clients under different savings schemes even though NRB guidelines require them to do so.
For instance, rate information posted by NCC Bank on its website only mentions ´attractive interest rates´ for most of its savings schemes.
NRB had termed wide gaps in interest returns offered for different savings schemes ´unjustifiable´, particularly as banks and financial institutions (BFIs) offered loyal depositors only meager interest rates even while promising high interest returns to new depositors.
“This is not fair. BFIs should treat all clients equally and ensure them similar if not the same returns,” NRB Governor Dr Yuva Raj Khatiwada had told Republica while implementing the guidelines.
Information posted by the banks on their website shows that Prime Commercial Bank is still operating with a savings interest rate gap of 5 percentage points. It promises 3 percent interest returns on normal savings, but offers 8 percent interest to privileged savings, shareholder savings and corporate staff savings.
Savings interest rates gap at ADBL and Laxmi Bank also stands at 5 percentage points. Nabil is operating with an interest gap of more than 4 percentage points on different savings products. It pays 2 percent interest on savings salary accounts and 6 percent to Nabil Bachat holders.
Nepal SBI Bank offers 4 percent interest to Varista Nagarik Bachat holders but as much as 7 percent to Indreni Bachat holders. Even its interest rates for Indreni Bachat vary by 2.5 percentage points. For instance, the bank offers 4.5 percent return to depositors saving up to Rs 100,000, whereas people saving above Rs 1 million under the same scheme are paid 7 percent returns.
Everest and NIC Bank both are operating with an interest rate gap of 3.5 percentage points. RBB´s savings interest rate gap stands at 2.5 percentage points, while the gaps at Siddhartha Bank and Machhapuchhre Bank stand at 3.75 percentage points and 4 percentage points respectively.
Asked about the discrepancies, some bankers said they were reviewing their rates. Others, however, said the guidelines from NRB were faulty.
Not that NRB is unaware of the situation. Governor Khatiwada, during the inauguration of Century Bank on Thursday, said pointedly that many banks have still not implemented the guidelines.
What is surprising is the lack of initiative by NRB to enforce its own guidelines.
On being asked, NRB spokesperson Bhaskar Mani Gyawali said the banks might not have responded to the guidelines promptly because the central bank had not set any deadline for implementation.
“BFIs are professionally run institutions and we expected them to act accordingly. If not, they must understand that such defiance can be penalized,” he said, urging all BFIs to comply with the guidelines immediately.
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