Review Nepal News

NBA urges NRB to revise the formula to calculate the spread rate

www.reviewnepal.com
  Kathmandu, Nepal      August 08 2019

 

Kathmandu, Nepal, August 8, 2019: Nepal Bankers’ Association (NBA) the umbrella organization of various 28 commercial banks has demanded to revise the formula to calculate the spread rate that banks are required to maintain.

Expressed serious objection over the central bank’s recent decision, NBA has urged the Nepal Rastra Bank (NRB), the central bank of the country to revisit its decision regarding the spread rate.

Issuing a press statement the umbrella organization of the commercial banks has claimed that implementation of the new spread calculation method will directly squeeze the banks’ profits by almost Rs 30 billion, which would stand about 25 per cent of the total profits in the banking sector. 

The Central Bank had issued a directive on Monday to the commercial banks to implement the new rule on spread calculation.  As per the new directive, the banks cannot include their interest-earning from investments in government securities while calculating the spread rate as allowed earlier.