Fraudulent business amid the pandemic

NIC Asia Bank consoles borrowers after sharp interest rate hike

KATHMANDU: NIC Asia Bank has started consoling borrowers after it came to light that the bank had been charging very high interest rates.

The news that NIC Asia Bank is charging an interest rate of up to 15.7% from businessman Dinesh Subedi was first published by

After this, bank employees have been meeting Subedi directly and assuring him that they will reduce the interest rate. Subedi said that the bank has promised to provide a loan at 8.5% interest. 

However, he said that he was not in the mood to sign an agreement with NIC Asia under any circumstances, saying that he will not remain silent and will not abide by any condition of the bank until the fraudulent business of NIC Asia Bank is stopped. 

“I am working to compile a list of those who have been frauded by this bank by publishing information in newspapers,” he said.

Nepal Rastra Bank (NRB) Spokesperson Dev Kumar Dhakal said that the bank has been instructed to reduce the interest rate after finding out that the bank has taken 8.93% premium and 15.70% interest rate, at the base rate of 6.77%.

“We have instructed NIC Asia Bank to reduce interest rates and we have also received information that the bank has reduced the interest rates,” he said.

The Nepal Rastra Bank (NRB) had directed to reduce the interest rate saying that there was a complaint against the bank, which responded that the interest rate may have been increased by mistake. The bank has been forced to reduce interest rates following the directive of the central bank. An employee of NIC Asia Bank, on the condition of anonymity, said that the interest rate has already been reduced. The bank has reduced interest rates due to pressure from NRB, he said.  

Nepal Rastra Bank making preparations to fix the premium rate 

Although banks have to provide loans by adding a premium of 2% to the base rate, NIC Asia Bank has taken a premium of around 9%. 

It is informed that NRB is making internal preparations to fix the premium rate after this NIC Asia incident. Even if banks initially agree not to charge more than 3% premium, they make agreements with the borrower to charge up to 10%. The debtor is not in a situation to disagree. 

Due to the obligation of the service recipient, the agreement prepared by the bank has to be signed. Banks are charging high interest rates based on the said provision of the agreement. Banks have been charging high interest rates to borrowers by adding a premium of up to a whopping 10% to the base rate.

Central bank urges to use fixed interest rates

Nepal Rastra Bank (NRB) has urged to take loans through fixed interest rates to avoid interest rate panic. Nepal Rastra Bank (NRB) has requested to take a loan at a fixed interest rate as the bank can charge an interest rate on retail loans arbitrarily. NRB already issued instructions last year to fix the interest rate on retail loan products by changing the related working procedure. The bank has also been instructed to make necessary arrangements for fixed interest rates through the monetary policy of the current fiscal year. 

However, banks have been reluctant to implement a fixed interest rate policy, as it would not be possible to suddenly spike interest rates as in a variable interest rate policy. NRB Spokesperson Dhakal urged the service recipients to take loans through fixed interest rates in order to avoid being cheated on by banks. 

“Banks will not be able to raise interest rates in the short run, and fraud can be avoided if loans are taken at fixed interest rates,” he said. “If the banks do not agree to provide loans at a fixed interest rate, you can file a complaint with the Rastra Bank.” 


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