Banking News – President of the Merchant Banker Association (MBAN), Ramendra Rayamajhi, has stated that a single discussion will not solve the problems of the capital market. Addressing the Nepal Capital Market Discourse 2026, organized by Banking Samachar with NASA Securities as the main sponsor, Rayamajhi expressed his views on the current state of the market.

Rayamajhi noted that market capitalization has declined by approximately Rs 300 arab in the last two to three months. He stated that while volatility in the capital market could have been controlled in time, sufficient efforts have not been made in that direction. He emphasized the need to develop surveillance capacity for effective market monitoring and to create new financial instruments for risk management in the market. He also stated that hedging mechanisms are necessary in the market.

“Some hope has grown from the guidance brought by the new Chairman,” Rayamajhi said. According to him, the stable government and SEBON’s new leadership have raised expectations among capital market stakeholders. Rayamajhi stated that they are ready to cooperate and collaborate with the government and SEBON. However, he added that a single discussion will not solve all the problems of the capital market. He pointed out the need to build new infrastructure along with structural reforms to make the capital market sustainable and well-regulated.

Based on Chairman Rayamajhi’s Remarks

The MBAN President stated that reforms are urgently needed in three key areas to address the instability seen in Nepal’s capital market. Comparing the recent market decline to the devastation caused by the flood, he stated that investors have suffered huge losses due to limited instruments and weak regulation. He noted that approximately Rs 3 arab in market capitalization has been lost in a short period. He stated that this situation has arisen due to the lack of adequate instruments, surveillance, and capacity to handle real demand, and that losses could have been prevented if timely corrective measures had been taken.

To provide stability to the market and mitigate future risks, he highlighted three main areas for reform. First, it is essential to make the regulatory body’s surveillance capacity more efficient and effective. Second, sophisticated financial instruments capable of managing market losses and risks should be introduced, rather than relying solely on traditional tools. Third, the scope of capable institutional investors needs to be expanded broadly to keep the market stable.

He cited the example of India, which transformed its market after the 1992 crisis by introducing a regulatory framework within two months and a trading platform within four months. He emphasized that Nepal must also undertake similarly bold reforms. He noted that the arrival of new regulatory leadership has brought enthusiasm to the market. He expressed confidence that through a 10-year strategic roadmap, the goal of increasing market capitalization by 50 percent, listing 200 new SME companies, and doubling the number of listed companies can be achieved. He also stated that new policies, rules, and technology are needed to promote investment in environmental, social, and governance sectors and to attract foreign investors. He committed that merchant bankers are ready to cooperate with the government and SEBON for amendment of existing regulations and structural changes, as old rules and structures cannot address current needs.