Banking News – Prime Minister Balen Shah has reaffirmed the government’s commitment to strengthening Nepal’s capital market, describing it as a key driver of economic growth, entrepreneurship, and employment generation.

Speaking at a meeting with representatives of capital market institutions and regulatory bodies at the Office of the Prime Minister and Council of Ministers on Monday, Shah said the government considers the development of the capital market a strategic priority for achieving sustainable economic prosperity.

He urged market participants to continue working with confidence and stressed the need to build a professional, transparent, and credible capital market. Shah added that a stronger capital market would promote entrepreneurship, attract investment, and create new employment opportunities.

The Prime Minister also stated that the government would continue to encourage businesses and individuals contributing positively to the economy while maintaining a zero-tolerance policy toward wrongdoing and market misconduct.

During the discussion, stakeholders called for comprehensive legal, policy, institutional, and structural reforms to support the long-term development of Nepal’s capital market. They said the dialogue with the Prime Minister had strengthened their confidence in the government’s commitment to the sector.

Participants recommended reforms to the initial public offering (IPO) system, improved mechanisms for balancing demand and supply in the secondary market, and measures to increase daily stock market turnover to more than Rs. 30 billion.

They also urged the government and the Nepal Rastra Bank to facilitate easier margin lending through banks and financial institutions for broker companies. In addition, they proposed abolishing the current rule that prevents banks and financial institutions from selling securities for at least six months after purchasing them and recommended revising the ceiling on share-backed loans by linking it to 5% of a bank’s total loan portfolio instead of its core capital.

Other recommendations included introducing tax adjustments for losses incurred in individual share trading, encouraging large institutional investors such as the Employees Provident Fund, Citizen Investment Trust, and Social Security Fund to invest more actively in the secondary market, restructuring the Nepal Stock Exchange (NEPSE) with a strategic partner, and creating a framework that would allow Non-Resident Nepalis (NRNs) to invest in Nepal’s capital market.

Representatives attending the meeting included Sagar Dhakal, President of the Stock Brokers Association of Nepal; Sandeep Jalan of Nasa Securities; Navaraj Silwal of Nepal Life Insurance; Maheshwar Lal Shrestha, CEO of Citizen Stock Dealer Company; Priya Raj Regmi, Chairperson of the Capital Market Committee; and investor Ambika Prasad Poudel.

On behalf of the regulators, Dr. Gopal Bhatt, Chairman of the Securities Board of Nepal (SEBON), said the board had already implemented the Capital Market Policy for Fiscal Year 2083/84 and the Nepal Capital Market Roadmap 2083, adding that their programmes are being executed in phases through a structured action plan.

Similarly, Amrit Lamsal, Chairman of the Nepal Stock Exchange (NEPSE), said the process of drafting and amending laws related to the banking, financial, insurance, and capital market sectors has already begun. He also reaffirmed NEPSE’s commitment to restructuring the exchange under an appropriate model and further modernising the securities trading system in line with SEBON’s policy framework.