KATHMANDU: Nepal Rastra Bank has allowed banks and financial institutions to divest their stock market investments after 45 days. The central bank issued a directive on Thursday introducing the new provision. Previously, banks were required to hold shares of companies listed on the Nepal Stock Exchange for at least six months before selling them.
The central bank’s new policy enables banks to sell their holdings after 45 days, regardless of market gains or losses, facilitating faster recovery of their capital. This move follows the 21-point capital market reform plan recently unveiled by Finance Minister Dr. Swarnim Wagle, which included a commitment to simplify the divestment process for banks.
Under the new guidelines, banks may only invest in shares and debentures of listed organized institutions for periods exceeding 45 days. The central bank has also prohibited any form of short-term investment in such securities. To implement these changes, banks and financial institutions are required to have their specific investment policies and procedures approved by their respective boards of directors. This requirement for board approval also applies to investments made in government securities and Nepal Rastra Bank bonds.
