Bank Interest Rates

Base Rate is the single and most important factor in determining the Interest Rate in Nepali banks. Base rate is the minimum standard interest rate set by every bank below which a commercial bank isn’t allowed to lend money to its clients. Using this rate, the banks can determine the interest rate in almost every floating loan product in the banking sector.

In simple terms, the base rate is the bank’s fundamental cost of doing its lending business. So, lending below this rate means the bank would be losing its money before even factoring in risk or profit.

Base Rate