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NIC Asia Bank tightens the screw on Covid-hit customers

The Annapurna Express

The Annapurna Express

NIC Asia Bank tightens the screw on Covid-hit customers

The bank recently hiked interest rates for consumers availing home and car loans. The consumers, who were paying 9-10 percent interest on their loans

Top Nepal banks have been reaping bumper profits even in the middle of a raging pandemic. But they have been reluctant to open their pursue strings for Covid-19 relief and help their country and communities. Instead, some are adding to the burdens of Covid-hit customers. 

NIC Asia Bank, one of the country’s top banks, has landed in trouble with the central bank after it was found to be charging exorbitant interest rates on loans to consumers.

According to bank documents published by various online news websites, the bank recently hiked interest rates for consumers availing home and car loans. The consumers, who were paying 9-10 percent interest on their loans, have now been told to pay up to 15.7 percent, the documents reveal.

In its letter to one of the consumers, the bank has reduced its base rate but hiked the premium on the base rate to jack up the effective interest rate. Experts say that it is unusual for the bank to quote a premium of over 7 percent when the base rate stands at 6.77 percent. Most banks usually quote a premium of around 2 percent.

Following complaints from the public, the Nepal Rastra Bank has written to the bank seeking clarification on the issue. The NRB said it would decide future course of action based on the bank’s clarification.