Kathmandu. Nepal Rastra Bank (NRB) has tightened its share-based credit through monetary policy for the current fiscal year. An individual and a company can take up to Rs 40 million from a bank in a share-based loan and banks and financial institutions cannot take more than Rs 120 million in total. With the provision of share loan made by the National Bank in the monetary policy, the share market was badly affected. Overall, share-based debt has declined by Rs 2 billion in three months.

Finance Minister Janardan Sharma had met Governor Maha Prasad Adhikari before the first monetary policy review. The Finance Minister has instructed the Governor to change the system of share capital.

According to a Nepal Rastra Bank source, the Finance Minister has asked the Governor to change the current system of share capital which has affected the psychology of investors. Nepal Rastra Bank (NRB) is preparing to conduct the first quarterly review of the monetary policy by next week by changing the current provision of shareholders in the first quarterly review of the monetary policy.

The NRB is preparing to increase the limit of Rs 40 million to Rs 100 million and the limit of Rs 120 million to Rs 300 million and reduce the loan from 70 percent to 65 percent. NRB has changed four policy provisions in the last one year to control the growing share market. The provision to get share-based loan at an average price of 120 days was made 180 days. Similarly, NRB had made an arrangement that banks and financial institutions would not be allowed to sell shares in the secondary market after buying shares for one year and banks and finance companies would not be allowed to buy shares of microfinance.