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Most commercial banks in Nepal have kept their interest rates unchanged for the month of Magh (mid-Jan to mid-Feb). Of the 20 commercial banks in the country, 17 have maintained their interest rates on individual fixed deposits for the 10th month of fiscal year 2024-25, while two have lowered their rates, and one has raised.

Interest rates on deposits are not increasing as credit expansion by banks has been slow due to the prolonged economic slowdown. Because of excess liquidity in the banking system, the central bank mopped up Rs 40bn through a deposit auction on Sunday.

Laxmi Sunrise Bank is the only Class ‘A’ bank that has raised its interest rate for the new month. The bank, which offered 5.5 percent interest on individual fixed deposits in Poush (mid-Dec to mid-Jan), is now offering 5.75 percent in Magh.

Agricultural Development Bank Ltd (ADBL) and Nepal SBI Bank have lowered their interest rates on individual fixed deposits. ADBL, which offered 5.57 percent interest in Poush, is now offering 5.51 percent. It has kept the interest rate on institutional fixed deposits unchanged at 3.25 percent. Meanwhile, Nepal SBI Bank has decreased its rates by 0.5 percentage points for both individual and institutional deposits. Nepal SBI has fixed interest rates for individual and institutional fixed deposits at 5.5 percent and 4.5 percent, respectively, for Magh.

Citizens Bank International has raised its interest rate on institutional fixed deposits by 0.5 percentage points to 4.5 percent. The bank has kept the interest rate on individual fixed deposits unchanged at 5.65 percent.

NIC Asia Bank and NMB Bank are offering the highest interest rate of 6.6 percent on individual fixed deposits in Magh. The two banks are also offering the highest interest rate of 5.6 percent on institutional fixed deposits. Nepal SBI Bank is offering the lowest interest rate of 5.5 percent on individual fixed deposits. ADBL and Standard Chartered Bank are offering the lowest interest rate of 3.25 percent on institutional fixed deposits.

Nepal Bank Ltd, which has kept its interest rate on individual fixed deposits unchanged, has lowered interest rate on institutional fixed deposits by 0.55 percentage points to 4.15 percent.

Everest Bank Ltd, Global IME Bank Ltd, Himalayan Bank Ltd, Kumari Bank Ltd, Machhapuchchhre Bank Ltd, Nabil Bank Ltd, Nepal Investment Mega Bank Ltd, NIC Asia Bank, NMB Bank, Prabhu Bank Ltd, Prime Commercial Bank Ltd, Rastriya Banijya Bank Ltd, Sanima Bank Ltd, Siddhartha Bank Ltd and Standard Chartered have kept their deposit interest rates unchanged.

On July 4, the government set the support price for paddy: Rs 3,410.51 per quintal for coarse paddy and Rs 3,580.62 per quintal for medium-grade paddy. Hearing this news, Devi Chaudhary, a farmer from Lamki Chuha-4, Kailali, was delighted. Having cultivated paddy on almost eight bighas of land, Chaudhary was hopeful for a good income this year. The government’s announcement of a support price higher than the Rs 3,100 per quintal being offered by traders brought joy to Chaudhary and many other farmers.

However, the government’s announcement didn’t translate into tangible benefits for Chaudhary. The government’s paddy purchasing centers, run by the Food Management and Trading Company Limited, were not accessible to him. As a result, Chaudhary had to sell his paddy to private traders for Rs 200 less per quintal than the government-set price. Adding to his disappointment, Chaudhary said he incurred further losses by storing the paddy at home for nearly two months, hoping for better prices. “I was thrilled when I heard the government had announced a support price,” Chaudhary said. “But the purchasing centers were far away, and the transportation cost was too high. That’s why I had to sell my paddy to private firms at a lower price. On top of that, storing the paddy at home for two months resulted in additional losses.”

Chaudhary explained that his stored paddy suffered losses due to drying, rodent damage, and birds. Initially, he had been cultivating paddy on three bighas but expanded to eight bighas this year by leasing additional land. Favorable weather, timely wedding, adequate fertilizers, and irrigation resulted in a harvest of over 200 quintals. Despite this, selling his paddy for Rs 200 less per quintal than the government’s price left him disheartened. He believes the government’s support price is merely a popular slogan. 

“The government should ensure that it buys paddy from farmers easily if it announces a support price,” Chaudhary said. “If farmers don’t benefit, it’s just a cheap slogan.” He added that while the government declares a minimum support price before planting begins, common farmers are unable to benefit due to a lack of designated purchasing centers, limited quotas for government procurement, and the inaccessibility of these centers.

Farmers engaged in large-scale commercial farming manage to arrange seeds and fertilizers on their own. However, average farmers face challenges and often take seeds and fertilizers from traders on the condition of selling their paddy back to them. Many even take cash advances. 

Farmers who take seeds and fertilizers on credit from traders for nearly four months are compelled to sell their paddy back to these traders at a lower price. “We’ve been buying seeds from private firms and selling our paddy to the same trader for years,” said Puran Pandey, who was unaware of the government’s support price. “The relationship with the trader and the credit taken for seeds and fertilizers means we continue to sell our paddy locally, even at a lower price.”

The lack of access to the Food Management and Trading Company’s designated purchasing centers has further deprived common farmers of the benefits of the support price.  

“From May and June, traders start investing in seeds, fertilizers, and even cash for farmers,” said food trader Raghu Upadhyay. “Since traders invest upfront, they expect some profit. There are risks, too—whether farmers will produce a harvest or repay the amount. That’s why traders buy paddy at a price lower than the support price. Additionally, government purchasing centers are far from farmers’ reach.”

The Nepal Stock Exchange (NEPSE) plunged by 15. 54 points to close at 2, 594. 13 points on Monday.

Similarly, the sensitive index dropped by 2. 56 points to close at 441. 42 points.

A total of 13,870,579-unit shares of 322 companies were traded for Rs 6. 65 billion.

Meanwhile, Barahi Hydropower Public Limited (BHPL) was the ​​​​​​top gainer today with its price surging by 10. 00 percent. Likewise, Aatmanirbhar Laghubitta Bittiya Sanstha Limited (ANLB) and Sindhu Bikash Bank Ltd (SINDU) were the top losers as their price fell by 10. 00 percent.

At the end of the day, the total market capitalization stood at Rs 4. 30 trillion.

The price of gold has increased by Rs 100 per tola in the domestic market on Monday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 155, 800 per tola today. It was traded at Rs 155, 700 per tola on Sunday.

Similarly, the silver is being traded at Rs 1,860 per tola today.