Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: A government-formed taskforce has recommended scrapping the Rs 250 million ceiling on share-backed margin loans in a bid to address challenges in Nepal’s capital market and restore investor confidence.
In its report submitted on Thursday, the taskforce advised the Ministry of Finance to lift the maximum single-borrower limit currently imposed on loans provided by banks and financial institutions against shares. The panel argued that such restrictions have constrained market liquidity and discouraged institutional investment.
The recommendations also include:
Scrapping the one-year maturity rule that permits banks and financial institutions to invest only in shares and bonds of listed organized institutions with maturity exceeding one year.
Allowing investors who were supposed to clear interest on share-backed margin loans by the end of Ashwin 2082 BS (mid-October 2025) to pay by the end of Poush 2082 BS (mid-January 2026) without incurring penalties.
Introducing a margin trading system through licensed stockbrokers.
Establishing uniform standards for issuing Investor Identification Numbers (IINs) by CDS and Clearing Ltd.
Retaining the NEPSE index as an all-equity index, while developing a new benchmark index based on tradable shares to guide market performance.
Reviewing the circuit breaker mechanism in line with the proposed benchmark index.
Clarifying that capital gains tax on non-business share sales should be treated as a final tax.
The taskforce was formed on Ashoj 3 (September 19, 2025) by Finance Minister Rameshwor Khanal to recommend reforms in the stock market. It was led by Rupesh KC, acting executive director of the Securities Board of Nepal (SEBON). Members included Sharan Adhikari, director at Nepal Rastra Bank; Niranjan Phuyal, acting CEO of Nepal Stock Exchange (NEPSE); and Sharad Niraula, undersecretary at the Ministry of Finance, who also served as the member-secretary.
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