NRB more concerned on safeguarding depositors than promoting investment
Nepal Rastra Bank (NRB), the central regulatory body of the banking and financial institution has ruled out the investor demand to lift margin. The bank mentioned the reason saying that the interests of depositors cannot be ignored.
Acting Governor of the NRB Krishna Bahadur Manandar said that the central body was more concerned for safeguarding depositors than promoting investment.
Speaking at an interaction on the solutions of the capital market’s problems, he said that it was the NRB responsibility to secure the investors and keep the capital market intact in the crisis period.
The capital market has fallen to a two-year low at 515.24 points and investors are showing low confidence towards investments and have lost millions of rupees.
Sashin Joshi president of the Nepal Bankers’ Association (NBA) said that Nepalese capital market was not in crisis but lacks the boost up measures.
He pointed out that NRB should assess on margin lending as banks are capable of analysing risk and benefits.
Investors have presented a 22-point reform pact including increase in margin from 50 to 70 per cent, end to promoter shares in ordinary share market and appointment of new brokers. NRB has decided to issue 19 per cent of promoter shares of financial institution to public.
Tanka Paneru, chairman of Nepal Stock Exchange (NEPSE) said that marginal lending process should be stopped for some months to make the capital market work properly.
He said that NEPSE would be back on track in the next six months after the introduction of central deposit system (CDS).
