Commercial Banks Ramp Up Share-Backed Lending After Nepal Rastra Bank’s Policy Shift

Commercial banks in Nepal have significantly increased their investment in share-backed loans (margin lending) following the introduction of a relaxed monetary policy by the Nepal Rastra Bank (NRB) for the current fiscal year 2082/83.

Governor Dr Bishwanath Paudel announced the policy change, which raised the lending limit for share-based loans from NPR 150 million to NPR 250 million and reduced the risk weight from 125% to 100%.

As a result, total share-backed lending surged to NPR 116.80 billion in FY 2081/82, a 66.05% increase compared to NPR 70.34 billion in the previous year — an additional NPR 46.46 billion in loans.

Top Performers in Share-Backed Lending

Some commercial banks recorded exceptional growth, more than doubling their lending portfolios:

• Machhapuchchhre Bank – up 442.09% to NPR 2.53 billion (from NPR 467 million last year).

• Nabil Bank – remains the largest lender, investing NPR 16.76 billion after a 46.68% increase from NPR 11.42 billion.

• Nepal SBI Bank – up 207.15% to NPR 619 million.

• Agricultural Development Bank – rose 192.66% to NPR 4.65 billion.

Other Banks Showing Strong Growth

Several other banks also reported substantial increases in share-backed loan investments:

• NMB Bank – 144% ↑ (NPR 2.39B)

• Laxmi Sunrise Bank – 143.53% ↑ (NPR 8.25B)

• Kumari Bank – 138.40% ↑ (NPR 10.43B)

• Prime Bank – 104.29% ↑ (NPR 8.28B)

• Sanima Bank – 100.51% ↑ (NPR 3.31B)

• Nepal Investment Mega Bank – 81.30% ↑ (NPR 3.36B)

• Everest Bank – 69.72% ↑ (NPR 3.44B)

• Prabhu Bank – 68.06% ↑ (NPR 5.34B)

• Global IME Bank – 63.74% ↑ (NPR 12.30B)

• Siddhartha Bank – 60.29% ↑ (NPR 9.28B)

• Citizens Bank – 46.17% ↑ (NPR 7.26B)

• Rastriya Banijya Bank – 44.49% ↑ (NPR 6.15B)

• Himalayan Bank – 34.88% ↑ (NPR 2.71B)

• Nepal Bank – 15.95% ↑ (NPR 7.86B)

NIC Asia Bank’s Decline

In contrast to the overall upward trend, NIC Asia Bank reduced its share-backed lending by 48.21%, bringing total investments down to NPR 2.05 billion from NPR 3.96 billion in the previous year.

Summary Table of Share-Backed Loan Investments