Kathmandu: The latest statistics of borrowing on the security of shares has been made public. According to the data of Nepal Rastra Bank for the last eight months, banks and financial institutions have disbursed share pledge loan of Rs. 81.41 billion. As of mid-February last year, banks and financial institutions had disbursed share pledge loans amounting to Rs 46.39 billion.

The stock market is booming now. Investors have also been encouraged to take share loans. A new environment is being created in the share market as banks and financial institutions have increased the flow of credit on share collateral. According to the data of the Central Bank, out of the loans disbursed by banks and financial institutions in the last few months, the share mortgage loans (of margin nature) have increased at a higher rate.

Although the effects of the corona virus have waned, not all sectors of the economy have returned to normal. Due to which, the demand for loans from those sectors has not been as high as expected, the bankers said. Now that the second wave of epidemics has started again, the government has started cracking down on it. Due to which, it can be estimated that the loans of the banks will go to the share market for some time to come.

Banks and financial institutions have increased their loan investments in the open stock market after the lockdown eased. However, the stock market has continued to rise (on average) since the lockdown eased. Earlier, banks and financial institutions had disbursed only Rs 50.40 billion as of mid-July last year. Thus, the share pledge loan has increased by 61.5% in the last eight months.