NIC ASIA Bank Offers Share-Backed Loan with Competitive Interest and Flexible Repayment

20th November 2025, Kathmandu

NIC ASIA Bank has introduced its Share Loan facility, offering a reliable and highly competitive financing option that allows investors to leverage their existing stock holdings for liquidity.

NIC ASIA Share-Backed Loan

This product is specifically designed to provide investors with a fast and transparent way to access funds without the necessity of selling their equity investments, a common financial maneuver in the capital market. The loan underscores the bank’s commitment to expanding modern, investment-friendly financial solutions to support customers in their wealth-building journey.

Key Features and Competitive Pricing

The share-backed loan is characterized by attractive and competitive terms aimed directly at appealing to active investors in the Nepal Stock Exchange (NEPSE).

Pricing Benefit: The bank is offering the loan with a notable feature of zero percent premium for the floating rate option over its base rate, meaning the interest rate applied will be the base rate plus a risk premium, providing a highly cost-effective source of funding.

Interest Rate Structure: The facility offers two options for interest calculation to suit different investor preferences:

Fixed Rate: The rate is set at a competitive 9.50 percent per annum, offering predictability in borrowing costs.

Floating Rate: The rate is calculated as the Base Rate plus Risk Premium (percent per annum), allowing the interest cost to fluctuate in line with the bank’s prevailing base rate.

Service and Repayment: The facility promises fast and transparent service and provides flexible repayment plans, which are crucial for catering to the dynamic and often time-sensitive financing needs of stock market participants. The loan tenure is set for a maximum of up to one year.

Loan Mechanics and Regulatory Compliance

The mechanism for determining the maximum loan amount is based on strict regulatory guidelines set by the Nepal Rastra Bank (NRB) to protect both the borrower and the bank from sharp market volatility.

Security: The loan is secured exclusively against ordinary shares of companies listed on the Nepal Stock Exchange (NEPSE). These shares must be on the bank’s approved acceptable list for collateral purposes.

Loan-to-Value (LTV) Ratio: Borrowers can obtain financing of up to 70 percent of the valuation of the pledged shares. This 70% LTV is the regulatory ceiling for margin lending in Nepal.

Valuation Basis: The share valuation is determined by taking the lower value between two metrics, ensuring a conservative and prudent lending approach:

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• The prevailing market price of the share.
• The 180-day average closing price of the share.
• This method minimizes risk exposure associated with sudden spikes in the stock price and ensures asset quality for the bank.

Facility Types and Specific Loan Limits

The share loan is offered through two primary facility types, Demand Loan (DL) and/or Overdraft (OD), to provide flexibility in fund utilization.

Demand Loan (DL): A demand loan is a short-term, secured loan where the lender reserves the right to ask for full or partial repayment at any time, often with a short notice period (e.g., 30, 60, or 90 days). In the context of share-backed loans, interest is charged only on the amount utilized, not the full sanctioned limit.

Overdraft (OD): An overdraft facility allows the customer to borrow money up to a pre-approved limit through their current or savings account. Like the Demand Loan, the borrower pays interest only on the amount actually drawn down.

Loan Range and Regulatory Cap

The individual loan limits are structured to adhere to the central bank’s guidelines while accommodating the needs of serious investors.

Minimum Loan Amount: The facility has been set with a minimum borrowing requirement of NPR 5 million.

Maximum Loan Amount: The maximum combined borrowing limit for a single customer is up to NPR 120 million. This total is the sum of the maximum allowable Overdraft limit (up to NPR 5 million) and the maximum allowable Demand Loan limit (up to NPR 120 million), ensuring that the total exposure does not exceed the NPR 120 million ceiling.

It is important to note that the Nepal Rastra Bank has frequently adjusted the maximum single-obligor limit for share-backed loans. Recent changes indicate the removal of the cap for institutional investors and adjustments to the cap for individual investors, which often impacts the maximum ceiling banks can offer. The bank’s current maximum of NPR 120 million is a reflection of its most updated internal policy within the regulatory framework for individual borrowers.

Applicant Requirements

To be eligible for this loan facility, applicants must meet specific age and compliance criteria.

Age Criteria: Applicants must be between 21 and 70 years of age.

Fees and Charges: All standard fees and charges for processing, legal, and operational costs are applied as per the bank’s published tariff schedule.

By structuring a flexible product with competitive rates and transparent valuation, NIC ASIA Bank remains focused on its strategic objective of offering modern financial solutions that facilitate capital market participation and the long-term wealth creation goals of its customers.

For More: NIC ASIA Share-Backed Loan