Monetary Policy 2024/25: NRB abolishes institutional share mortgage loan limit

KATHMANDU: Nepal Rastra Bank (NRB) has made significant adjustments to share mortgage loans in the monetary policy for fiscal year 2024/25 unveiled today.  

The maximum limit previously imposed on institutional share mortgage loans has been abolished. This move aims to facilitate investment in the capital market by institutional investors, particularly during situations where margin trading faces challenges.

NRB Governor Maha Prasad Adhikari, during the policy unveiling, clarified that banks and financial institutions (BFIs) will no longer be bound by the previous cap of Rs 200 million for institutional investors. This change is expected to encourage greater participation in the capital market.

However, the monetary policy has not introduced any new provisions related to share mortgage loans for individual investors. The focus remains on institutional investors and their engagement in the securities market. 

The central bank has granted consent to 34 securities broker companies to promote the concept of margin trading while gradually reducing direct loan investments from BFIs in the securities sector.