NRB Removes Rs. 25 Crores Limit on Individual Share-Pledge Loans
October 9, 2025 | Investopaper
Nepal Rastra Bank has removed the ceiling on individual share-backed loans, eliminating the previous cap of Rs. 25 crores per borrower. The central bank issued a circular on Wednesday removing the maximum single-customer loan limit that had restricted margin lending against share collateral to Rs. 25 crores across all banks and financial institutions.
The policy change follows recommendations from a government-appointed committee tasked with suggesting measures to strengthen the capital market. The Ministry of Finance issued directives on Wednesday to implement the committee’s suggestions, which the central bank promptly acted upon.
The regulatory changes extend beyond loan limits. Nepal Rastra Bank has adopted more flexible policies regarding share trading by financial institutions themselves. Banks and financial institutions can now invest in stocks for periods as short as six months, down from the previous minimum requirement of one year. The shortened timeframe applies to shares and debentures of organized institutions that have completed their initial public offerings and are listed on the Nepal Stock Exchange (NEPSE).
The central bank has also scrapped a rule that restricted the sale of such investments. Previously, financial institutions could only sell up to 20 percent of their core capital in share investments within a single fiscal year, and only after holding the shares for at least one year. This restriction has now been eliminated entirely.
The reforms are expected to increase liquidity in the stock market by enabling both individual investors and financial institutions to participate more freely in share trading and investment activities.
