Nepal Rastra Bank Increases Share Mortgage and Personal Overdraft Loan Limits

Kathmandu. Nepal Rastra Bank has increased the limits of share mortgage (margin lending) and personal overdraft loans by releasing the annual review report of the monetary policy for the fiscal year 2082/83. The central bank has adopted a policy to increase the limits of share mortgage loans and personal overdraft loans. Through the review, the existing limit of personal overdraft loans provided by banks and financial institutions has been increased, with the limit per customer increased from the previously set limit of Rs 5 million to Rs 10 million. Share mortgage loan limit Rs 25 million To help make the capital market dynamic, the central bank has also adopted a flexible policy on margin loans. The existing single customer loan limit for margin loans provided by banks and financial institutions against shares has been increased from Rs 15 million to Rs 25 million. This revision is estimated to provide further relief to large investors in the stock market to expand their investments. Similarly, another new arrangement has been made keeping in mind the loan disbursement capacity and capital fund management of banks and financial institutions. An arrangement has been made whereby banks and financial institutions can count the amount of regulatory reserve created from non-banking assets for two years after acquiring them as Tier 2 capital.