On Asoj 22, 2082, Nepal Rastra Bank (NRB) issued a circular removing the single-customer loan limit for margin-based share-backed loans provided by banks and financial institutions of Class A, B, and C. Previously, the maximum loan limit per customer for margin lending through share collateral was set at Rs. 25 crore. This change follows recommendations from the Capital Market Reform Suggestion Taskforce.
NRB now allows banks and financial institutions to extend margin loans up to 40% of their core capital. Currently, Nepal has 20 commercial banks, although Standard Chartered Bank has not provided any margin loans. According to NRB data, as of the end of Saun 2082, banks and financial institutions had disbursed Rs. 144 billion in margin loans, of which Rs. 120 billion came from Class A commercial banks, while Class B and C financial institutions provided Rs. 24 billion.
The latest data shows that the total core capital of the 20 commercial banks amounts to Rs. 600 billion, and 40% of this is Rs. 240 billion. Since Rs. 120 billion in margin loans has already been disbursed, commercial banks collectively have the capacity to extend an additional Rs. 120 billion in margin loans.
Among the banks, Nabil Bank has disbursed the highest margin loans of Rs. 16.57 billion, followed by Global IME Bank with Rs. 12.89 billion, and Kumari Bank with Rs. 11.25 billion. These are the only three banks that have extended over Rs. 10 billion in margin loans.
In terms of remaining lending capacity, Nepal Investment Mega Bank leads with the ability to extend Rs. 17.47 billion in additional margin loans, while Siddhartha Bank has the lowest capacity at Rs. 78 million.
This article was originally published on https://bajarkochirfar.com. Translated with the help of AI and reviewed by our editorial team.
