With the broken agreement, banks now can fix the interest rates on deposits by themselves. Previously, the NBA through the agreement had fixed 7 percent interest rate on institutional fixed deposit, 8.5 percent on general fixed deposits and 5.5 percent on savings. However, as there is sufficient liquidity in the banking sector currently, the association decided that the agreement is of no use.
Bhuwan Dahal, Chairman of NBA said that the association has handed over the decision making on the interest rates to the banks.
