Kathmandu. Share loans (margin lending) in Nepal generally range from 5.5% to 11.5% per annum. The final rate is calculated by adding a fixed premium (usually (1.50%) to (4.00%)) to the bank's published Base Rate. Loans are typically revolving with a tenure of up to 1 year and a financing limit of 50% to 70% of the share value.

Nepal Rastra Bank introduced flexibility in the policy related to share collateral loans, commercial banks have significantly increased their investment in the capital market. In the first nine months of the current fiscal year 2082/83, banks' share collateral loans increased by 34.55 percent to 35.10 billion 9.5 million rupees, according to the data of the Nepal Rastra Bank.During this period, most banks have expanded share collateral loans.

The largest increase has been made by the Agricultural Development Bank, which has increased by 179.71 percent, adding 5.45 billion rupees to a total of 8.49 billion rupees in share loans. Last year, the bank's investment in shares was only 3.3 billion rupees. Nabil Bank has become the bank providing the highest share collateral loans in terms of amount. Nabil Bank has increased by 19.94 percent, adding 2.89 billion rupees to a total of 17.40 billion rupees.

Machhapuchhre Bank's share capital increased by 136.93 percent, or Rs 2.48 billion, to Rs 4.29 billion, Sanima Bank's share capital increased by 99.83 percent, or Rs 2.48 billion, to Rs 4.90 billion, NMB Bank's share capital increased by 91.42 percent, or Rs 1.91 billion, to Rs 4 billion, NIC Asia Bank's share capital increased by 91.37 percent, or Rs 2.22 billion, to Rs 4.65 billion.

Everest Bank's share capital increased by 83.35 percent, or Rs 2.31 billion, to Rs 5.08 billion, Laxmi Sunrise Bank's share capital increased by 82.17 percent, or Rs 4.28 billion, to Rs 9.49 billion, Himalayan Bank's share capital increased by 74.38 percent, or Rs 1.57 billion, to Rs 3.69 billion, and Rastriya Banijya Bank's share capital increased by 67.91 percent, or Rs 3.31 billion, to Rs 8.20 billion.

Prabhu Bank's investment increased by 31.70 percent or Rs 1.47 billion to Rs 6.12 billion, Prime Bank's investment increased by 24.49 percent or Rs 1.90 billion to Rs 9.69 billion, Nepal Investment Mega Bank (NIMB) increased by 20.36 percent or Rs 657.6 million to Rs 3.88 billion, Kumari Bank's investment increased by 19.59 percent or Rs 1.79 billion to Rs 10.93 billion.

Similarly, Global IME Bank's investment increased by 17.85 percent or Rs 2.08 billion to Rs 13.73 billion, Siddhartha Bank's investment increased by 5.62 percent or Rs 479.4 million to Rs 9.32 billion.

Nepal Bank, Citizens Bank and Nepal SBI Bank have reduced their investment in shares during the review period. Nepal Bank's shareholding has decreased by 15.08 percent, or Rs 1.18 billion, to Rs 6.64 billion, Citizens Bank's shareholding has decreased by 14.02 percent, or Rs 965 million, to Rs 5.88 billion, and Nepal SBI Bank's shareholding has decreased by 8.65 percent, or Rs 531 million, to Rs 560 million.