Increased limit for margin type loans; How much more can the commercial banks float?
Thu, Dec 27, 2018 2:37 PM on Economy, Stock Market, Exclusive, Latest,
- Puskar Shrestha
Nepal Rastra Bank’s recent issue of circular for the banks and financial institutions brought around many changes to be implemented. One of the major changes was the increment of margin loan capacity to 40% of the core capital. The margin loan capacity was decreased by the monetary policy to 25%. After the new amendment, the commercial banks will have increased capacity to provide the margin loan.
|
S.N. |
Bank |
Core Capital (Rs.) |
Current Floated Margin Type Loan (Rs.) |
% of core capital |
New Limit (40% of core capital) |
Excess lending capacity (Rs.) |
|---|---|---|---|---|---|---|
|
1 |
Prabhu Bank Limited |
11,31,09,49,778 |
2,62,79,00,000 |
23.23 |
4,52,43,79,911.20 |
1,89,64,79,911.20 |
|
2 |
Citizens Bank International Limited |
11,12,31,73,516 |
2,48,74,90,000 |
22.36 |
4,44,92,69,406.40 |
1,96,17,79,406.40 |
|
3 |
Siddhartha Bank Limited |
12,62,12,22,000 |
2,20,27,10,000 |
17.45 |
5,04,84,88,800.00 |
2,84,57,78,800.00 |
|
4 |
Prime Commercial Bank Limited |
11,44,91,01,482 |
1,99,33,80,000 |
17.41 |
4,57,96,40,592.80 |
2,58,62,60,592.80 |
|
5 |
Sunrise Bank Limited |
10,82,11,40,000 |
1,76,80,00,000 |
16.34 |
4,32,84,56,000.00 |
2,56,04,56,000.00 |
|
6 |
Laxmi Bank Limited |
10,86,03,00,000 |
1,49,03,70,000 |
13.72 |
4,34,41,20,000.00 |
2,85,37,50,000.00 |
|
7 |
Global IME Bank Limited |
12,85,47,98,277 |
1,73,13,80,000 |
13.47 |
5,14,19,19,310.81 |
3,41,05,39,310.81 |
|
8 |
Century Commercial Bank Limited |
9,68,77,28,348 |
1,18,78,90,000 |
12.26 |
3,87,50,91,339.20 |
2,68,72,01,339.20 |
|
9 |
Rastriya Banijya Bank Limited |
15,22,71,89,913 |
1,86,67,90,000 |
12.26 |
6,09,08,75,965.38 |
4,22,40,85,965.38 |
|
10 |
NIC Asia Bank Limited |
11,68,73,90,000 |
1,40,00,90,000 |
11.98 |
4,67,49,56,000.00 |
3,27,48,66,000.00 |
|
11 |
Civil Bank Limited |
9,57,03,22,320 |
1,10,70,90,000 |
11.57 |
3,82,81,28,928.00 |
2,72,10,38,928.00 |
|
12 |
Nepal Bank Limited |
20,50,12,76,000 |
2,15,00,30,000 |
10.49 |
8,20,05,10,400.00 |
6,05,04,80,400.00 |
|
13 |
NCC Bank Limited |
8,68,78,64,000 |
83,28,20,000 |
9.59 |
3,47,51,45,600.00 |
2,64,23,25,600.00 |
|
14 |
Nabil Bank Limited |
18,23,93,42,946 |
1,60,64,20,000 |
8.81 |
7,29,57,37,178.40 |
5,68,93,17,178.40 |
|
15 |
Himalayan Bank Limited |
14,10,51,92,846 |
1,11,85,50,000 |
7.93 |
5,64,20,77,138.40 |
4,52,35,27,138.40 |
|
16 |
Kumari Bank Limited |
10,35,78,06,871 |
69,23,30,000 |
6.68 |
4,14,31,22,748.40 |
3,45,07,92,748.40 |
|
17 |
Janata Bank Limited |
9,35,88,00,000 |
59,12,50,000 |
6.32 |
3,74,35,20,000.00 |
3,15,22,70,000.00 |
|
18 |
Everest Bank Limited |
14,38,43,64,000 |
88,56,70,000 |
6.16 |
5,75,37,45,600.00 |
4,86,80,75,600.00 |
|
19 |
Bank of Kathmandu Limited |
12,03,66,48,743 |
66,67,80,000 |
5.54 |
4,81,46,59,497.20 |
4,14,78,79,497.20 |
|
20 |
Sanima Bank Limited |
10,20,12,45,692 |
39,20,00,000 |
3.84 |
4,08,04,98,276.80 |
3,68,84,98,276.80 |
|
21 |
Nepal Investment Bank Limited |
22,46,11,34,035 |
84,43,90,000 |
3.76 |
8,98,44,53,614.00 |
8,14,00,63,614.00 |
|
22 |
Mega Bank Limited |
12,30,10,00,000 |
45,22,40,000 |
3.68 |
4,92,04,00,000.00 |
4,46,81,60,000.00 |
|
23 |
NMB Bank Limited |
15,93,96,29,765 |
54,89,90,000 |
3.44 |
6,37,58,51,906.00 |
5,82,68,61,906.00 |
|
24 |
Nepal Bangladesh Bank Limited |
11,67,04,62,000 |
37,30,90,000 |
3.20 |
4,66,81,84,800.00 |
4,29,50,94,800.00 |
|
25 |
Machhapuchhre Bank Limited |
10,10,77,70,000 |
31,51,70,000 |
3.12 |
4,04,31,08,000.00 |
3,72,79,38,000.00 |
|
26 |
Agriculture Development Bank Limited |
25,43,39,40,000 |
|
0 |
10,17,35,76,000.00 |
10,17,35,76,000.00 |
|
27 |
Standard Chartered Bank Limited |
13,94,92,17,816 |
|
0 |
5,57,96,87,126.40 |
5,57,96,87,126.40 |
|
28 |
Nepal SBI Bank Limited |
12,72,96,39,000 |
|
0 |
5,09,18,55,600.00 |
5,09,18,55,600.00 |
|
Average percentage of Core Capital |
9.09 |
Excess Lending Capacity (Rs.) |
1,16,53,86,39,739.39 |
|||
Evaluating the current data of the commercial banks, Prabhu Bank has already floated 23.23% of its core capital as margin loan while Citizens Bank has floated 22.36% of its core capital as margin type loan.
Out of the 28 commercial banks, Agriculture Development Bank, Standard Chartered Bank and Nepal SBI Bank have not floated any amount under margin type loans.
Other banks which have been floating margin type loans have kept the disbursement of margin type loan under previous 25% margin. So, there is a huge room for expansion after the recent circular of Nepal Rastra Bank.
As a whole industry, the commercial banks will be able to float Rs 1.16 kharba as excess margin loan. This huge increment consists Rs 20.84 arba of the three banks which have stayed away from the margin type loan.
The banks and financial institutions still have not given priority to the margin type loans, but with such changes brought by the regulators and improvement in the condition of stock market, it will not be long that such loans will form a large portion of the banks’ business.
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