4th August 2024, Kathmandu

Nepal Rastra Bank has revised its policy on share mortgage loans, removing the previous limit of Rs 20 crore for institutional investors.

Nepal Rastra Bank Removes Cap

This new policy, announced on July 26th, allows institutional investors who are established for stock market investments to obtain unlimited share mortgage loans from banks and financial institutions.

According to the updated guidelines, the maximum single-customer credit limit for margin-type loans from any or all licensed institutions on share securities remains at Rs. 15 crores. However, this restriction does not apply to institutional investors primarily focused on securities market investments.

The bank’s circular, issued on Friday, also states that investments in energy-related bonds, including those issued by public institutions and public limited companies in the energy sector, can be counted within the specified limits as investments in the energy sector.

Additionally, the circular mentions changes in the blacklisting criteria for loans guaranteed by builders. In the financial year 2081/82, debtors and related parties will only be blacklisted if their payment exceeds one year, as opposed to the previous 90-day period.

This policy shift aims to enhance liquidity and investment in Nepal’s stock market, providing greater flexibility and opportunities for institutional investors.

Nepal Rastra Bank Removes Cap on Equity Loans