Nepal Rastra Bank Slams Prohibition on Short-Term Share Trading While NEPSE is Breaking One Record After Another

Nepal Rastra Bank (NRB) has tightened the rules for banks and financial institutions to invest in the stock market. The central bank today issued a circular with additional regulations for banks and financial institutions to invest in securities trading.

NRB will no longer allow banks and financial institutions to buy and sell shares of listed companies in the secondary market for the short term. BFIs will not be allowed to sell the listed shares and debentures within a year of buying them. Nepal Rastra Bank has made such arrangements by amending the Unified Directive. This comes at a time when NEPSE has been breaking records after record with each passing day.

Furthermore, BFIs are not allowed to invest in the shares of "D" class financial institutions, i.e. microfinance companies except for the purpose of calculating "Deprived Sector Loans". If such shares were purchased before this date, they are required to sell the shares by Poush, 2078.