Banking News— The Share Investors Association Nepal has submitted a five-point proposal to Dr. Bishwo Nath Poudel, Governor of Nepal Rastra Bank, urging the central bank to incorporate measures supporting the growth and expansion of Nepal’s capital market in the monetary policy for the fiscal year 2083/84 BS.

According to the association’s President, Tara Prasad Phulle, the recommendations are aimed at making Nepal’s capital market more competitive, liquid, resilient, and investment-friendly.

Among its key proposals, the association called for greater flexibility for banks and financial institutions to invest in the secondary stock market. It urged the central bank to review existing restrictions, including investment limits, lock-in periods, and other regulatory provisions, and adopt a more flexible policy based on prevailing market conditions. The association argued that allowing well-capitalized institutions with adequate liquidity and sound risk management to participate more actively in the market would enhance institutional investment, improve market liquidity, and contribute to price stability.

The association also recommended reforming dividend distribution rules for microfinance institutions by replacing the current uniform approach with a more flexible framework based on factors such as financial health, capital adequacy, non-performing loans, profitability, and corporate governance.

In addition, it proposed introducing a risk-based margin lending system by replacing the existing uniform share-backed loan framework with a model that reflects the risk profile of listed securities.

The association further urged the central bank to facilitate investment by Non-Resident Nepalis (NRNs) in Nepal’s capital market while ensuring a smooth mechanism for repatriating investments when necessary.

It also recommended creating policy provisions that would allow long-term institutional funds including those managed by the Employees Provident Fund, Citizen Investment Trust, Social Security Fund, and insurance companies to participate more actively in the capital market under clearly defined risk management standards.