KATHMANDU, Oct 14: Banks and financial institutions (BFIs) have been found aggressively issuing loans against shares as collateral, with the figure reaching Rs 167.85 billion as of mid-September this year.
As per the records with Nepal Rastra Bank (NRB), the issuance of loans in this category has more than doubled in the past three years. The cumulative amount of disbursed margin nature loan as of mid-September in Fiscal Year 2023/24 was Rs 91.32 billion.
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Despite the significant volatility in the country’s stock market, the disbursement of share-backed loans has continued to rise. Loans under this category disbursed three years ago was only Rs 76.53 billion.
According to the NRB, 20 commercial banks alone disbursed loans of Rs 144.46 billion under the heading. The amount was 18.7 percent more than the amount of Rs 121.70 billion recorded in mid-September last year.
Meanwhile, development banks and finance companies have disbursed share-backed loans of Rs 19.78 billion and Rs 3.60 billion, respectively.