Relief for Share Investors: Nepal Rastra Bank Reduces Risk Weight on Share-Backed Loans

Nepal Rastra Bank (NRB) has released the third quarterly review of the Monetary Policy for the fiscal year 2081/82, bringing positive news for the capital market.

In a move likely to please share investors, the central bank has reduced the risk weight on share-backed (margin) loans from 125% to 100%.

This policy revision is expected to ease the flow of margin lending by commercial banks. With a lower risk weight, banks will have reduced capital requirements for such loans, enabling them to lend more aggressively against share collateral.

Market analysts suggest that this change will inject more liquidity into the stock market and potentially boost investor sentiment.

The reduction in risk weight is seen as a strategic step by the central bank to strengthen the market, especially during a time when the stock market has been witnessing sluggish momentum.

Investors and financial institutions alike are hopeful that this move will lead to increased activity and confidence in Nepal’s capital market in the coming weeks.