Under the nine-point deal, Nepal Rastra Bank (NRB) and Securities Board of Nepal (Sebon) will make necessary arrangement for easy availability of short term loans against share purchase receipts, said Finance Secretary Krishna Hari Baskota. [break]
Similarly, NRB and Sebon will also make further arrangement to provide long term loans to share investors. “The agreement has fulfilled most of our demands. We are hopeful it will halt the present spate of slowdown in the stock market,” Sitaram Thapaliya, president of Share Investors Forum told Republica.
As per the pact, Sebon, the capital market regulator, and Citizen Investment Trust (CIT) must implement within a month a guideline that aims to attract institutional investors into the stock market. "We have also asked Sebon to complete all the legal and policy formalities to bring Central Depository System (CDS), an online share trading system, into operation within July 16," said Baskota.
Similarly, NRB and Finance Ministry has agreed to jointly push ahead the process of establishing Assets Management Company (AMC) to purchase the bad assets of banks and financial institutions (BFIs).
Both sides also agreed to request to Company Registrar Office to implement the existing Buy Back Option, a provision in the Company Act that allows concerned companies to repurchase the shares whose value has dropped below the book value in the market.
The government has also assured investors that NRB, Sebon and Insurance Board, the three regulatory agencies, will take immediate actions against persons flouting corporate governance norms and leading the public companies into crisis.
Timely implementation of mutual fund and protection of public shareholders´ investment in case the listed companies are delisted at Nepal Stock Exchange (Nepse), too, have been assured in the new agreement.
Among others, the governor of NRB, finance secretary, top officials of Sebon and Nepse, and Stock Brokers Association of Nepal (SBAN) expressed their commitment to work in tandem to boost the stock market at the signing ceremony at the Finance Ministry. Finance Minister Barshaman Pun too was present on the occasion.
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