Nepal's Central Bank accused of trying to Destabilize the Stock Market: Investors express concern over NRB's inconsistency

In the review report of the first quarter of the fiscal year, 2077/78 published a few days ago, Nepal Rastra Bank has stated that the margin lending provision will be revised.

There is a general consensus in the investment arena that this was mentioned to revise the margin lending provision and prevent unnatural growth in the stock market. Since Nepal Rastra Bank had raised the margin lending limit to 70% with the new monetary policy, this could mean that NRB is planning to reduce the current percentage.

However, investors have submitted a memorandum to Nepal Rastra Bank showing concern about this shaky behavior of Nepal's central bank. The memorandum accuses the central bank of trying to destabilize the capital market of Nepal by becoming inconsistent in its provisions. Investors have also expressed concern about how a handful of people at NRB could decide on the fate of the capital market without consulting the regulatory body and investor circles. The capital market, the memorandum states, is relied on directly and indirectly by 30 lakh citizens, and a handful of decision-makers at NRB can't manipulate this freely-sustaining sector.

In response to the possible argument that NEPSE is growing unnaturally because of the higher limit on margin loans, the memorandum states that the capital market has just recovered to the Intensive Care Unit after being in a long coma. Furthermore, the stock prices are less than 20% to 30% of where they were in the previous bullish peak.

Stating all this, investors have submitted the memorandum to NRB with the signatures of heads of different investor forums and associations. When asked about her take on this, Radha Pokharel, President at Nepal Punjibazar Laganikarta Sangh said that this move is a sign of betrayal to the citizens by Nepal's central bank itself. Also, Pokharel stated that on their conversation with the Deputy Governor, he was of the opinion that NRB will work on the matter such that the situation will be taken care of without any harm on any side. 

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