Central bank asks BFIs to furnish details of share loans

ShareSansar, December 23:

Nepal Rastra Bank has asked all the BFIs to immediately provide the details of share loan they are pledging.

The central bank took the step on Sunday as lots of banks and financial institutions are pledging marginal lending against share certificates to cash in on the growing interest of the people in the stock market over the recent weeks, according to central bank sources.

Moreover, the BFIs are themselves struggling in the wake of surplus liquidity in the market and lack of sufficient investment opportunities.

This is not the first time the central bank has tried to stem marginal lending in a bid to control unsustainable growth of the share market as well as to maintain the financial health of the BFIs.

The central bank, which had relaxed the provision governing marginal lending after the market went on a downward spiral, is apparently trying to tighten it up now.