. KATHMANDU: Nepal Rastra Bank (NRB), the central bank of Nepal, has introduced a new and flexible provision in the issue of margin lending as per the provisions of the Monetary Policy for the current fiscal year. Issuing a directive, the central bank has made it mandatory for the banks and financial institutions to determine the limit of share mortgage loans on the basis of the strength of the respective company. <\/p>\n
The Nepal Rastra Bank (NRB) has set various criteria for evaluating the strength of an institution.<\/p>\n
According to the new directive, the size of the paid-up capital, minimum period of listing of securities, position of the company in profit and the history of dividend distribution should be the main basis while measuring the strength of a listed company. <\/p>\n
In addition, the credit rating of the company, compliance with the regulatory framework and \u00f7 of holding the AGM regularly should also be made the basis of the evaluation.<\/p>\n
The loan-value ratio of the loans provided against the collateral of the shares of companies that score high in such valuation i. e. those which are financially sound will be further discounted. In the case of such companies, the loan limit can be increased up to a maximum of 10 percent points above the existing limit. This will make it easier for the shareholders of companies with good financial statements and good governance to get more loans. <\/p>\n
The Nepal Rastra Bank (NRB) has also issued special directives to banks and financial institutions (BFIs) to make this process transparent and systematic.<\/p>\n
Banks will now have to mandatorily publish the valuation method and product paper to be adopted while issuing share mortgage loans on their official websites. This will give investors a clear idea of the basis on which the loan limit has been fixed. <\/p>\n
As per the existing provision, the loan is based on the average of the closing price of the last 180 working days published by the Nepal Stock Exchange (NEPSE) or the prevailing market price of the shares, whichever is lower. Shares can be issued only up to a maximum of <\/p>\n
70 percent of the value of the shares. The new system has provided flexibility of up to 10 percent in case of strong companies within the 70 percent limit. <\/p>\n
This new move of <\/p>\n
the central bank is expected to encourage companies that have maintained good governance in the stock market and are financially strong. In addition, it is believed that it will make share mortgage loans more secure and institutionalize the system of pricing loans based on risk. <\/p><\/p>\n","protected":false},"excerpt":{"rendered":"
. KATHMANDU: Nepal Rastra Bank (NRB), the central bank of Nepal, has introduced a new and flexible provision in the issue of margin lending as per the provisions of the Monetary Policy for the current fiscal year. Issuing a directive, the central bank has made it mandatory for the banks and financial institutions to determineContinue reading “New provision on share mortgage loan: Additional 10 percent loan will be available on shares of good companies”<\/span><\/a><\/p>\n","protected":false},"author":0,"featured_media":76400,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[147],"tags":[],"class_list":["post-76409","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-samachar-en"],"acf":[],"jetpack_featured_media_url":"https:\/\/arthakhabar.com\/wp-content\/uploads\/2026\/07\/985ab353-49dc-48c0-91b5-caafbac8edc9_17555f54.png","_links":{"self":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts\/76409","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/comments?post=76409"}],"version-history":[{"count":1,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts\/76409\/revisions"}],"predecessor-version":[{"id":76410,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/posts\/76409\/revisions\/76410"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/media\/76400"}],"wp:attachment":[{"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/media?parent=76409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/categories?post=76409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/arthakhabar.com\/ak_api\/wp\/v2\/tags?post=76409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}