`Reconsider lending rates'

Nepal Rastra Bank governor Dr Yubaraj Khatiwada has pointed out that financial institutions need to reconsider their lending rate so as not to scare off borrowers. “Since NRB started keeping track of the base rate of banks, we feel banks can afford to lower interest rate while continuing to earn normal profit,“ he said, at the inauguration of NIC Asia Bank. “Moreover, product-wise interest rate differentiation followed by banks is not rational,“ he said, stressing banks are charging less than 10 per cent on some loan products while others are charged as high as 17 per cent, and deposit rates offered on different savings products also vary by seven to eight percentage points.