High demand for loans above 10 million
KATHMANDU, Oct 17: In the current fiscal year, share-mortgage loans have flowed to Rs 9.67 billion in two months. This amount is 10.7 percent higher compared to last Ashad (mid-June to mid-July).
According to the Nepal Rastra Bank (NRB), banks and financial institutions (BFIs) had invested Rs 90.93 billion in share-mortgage loans by mid-July, which increased to Rs 99.76 billion by mid-September.
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With the continuous decline in interest rates which are falling to single digits, there has been an increase in the trend of taking loans from banks to invest in the stock market.
After mid-July, the stock market experienced a continuous rise, significantly increasing trading volume. By mid-August, when the NEPSE index reached 3,000 points, share trading amounted to as much as Rs 29.95 billion in a single day.
Share-mortgage loans exceeding Rs 10 million have increased by 17.9 percent. By mid-September, share-mortgage loans above Rs 10 million reached Rs 63.93 billion. In two months, such loans have seen an investment of Rs 10 billion.
The Nepal Rastra Bank adopted flexibility in share-mortgage loans through the monetary policy of the current fiscal year. By removing the limit of Rs 200 million for institutional investors in share-mortgage loans, the bank has seen an increase in loan investments.
Share-mortgage loans ranging from Rs 5 million to Rs 10 million have increased by 3.2 percent, reaching Rs 12.81 billion.
However, share-mortgage loans ranging from Rs 2.5 million to Rs 5 million have decreased by 3 percent, and those up to Rs 2.5 million have decreased by 3.9 percent.
