The banks have revised their lending rates upward in the range of 2.5 to 3.5 percentage points amid long-running liquidity crunch and enforcement of new lending policy by Nepal Rastra Bank. The new rates will not only impact the new borrowers, but will also add financial burden to the previous clients as well.
Among the retail products, commercial banks have hiked interest rates for housing loans sharply. Compared to mid-July, when Nabil Bank clients received housing loans at 9.5 percent per annum, the bank is charging the interest rate of as high as 13 percent to its client as of December-end.
Himalayan Bank Limited (HBL) too has increased its housing lending rate to 12.5 percent from 10 percent. Clients of Nepal Investment Bank Limited (NIBL) and Standard Chartered Bank Nepal Limited (SCBNL) can take respite though, as these banks have not yet effected any change in their interest rates.
Apart from higher interest rates, people hoping to buy land or housing with bank loans could also find it difficult to arrange finances, especially as a couple of banks have already stopped and some others have tightened their lending in the sector after the imposition of cap on loans exposed to realty sector.
Under the auto loans, Nabil Bank has increased its lending rate from 10 percent to 12.5 percent during the period. HBL too has increased its auto lending rate from 12 percent of mid-July to 13 percent in December-end.
Auto loans clients of NIBL and SCBNL, however, will continue to enjoy lower interest rate as they have not changed their interest rates so far.
The cost of finances on sectors like education loans and term loans too has soared in the wake of banks paying higher rates on deposits to beat liquidity crunch.
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