KATHMANDU, July 15: The Securities Board of Nepal (SEBON) is preparing to establish a Capital Market Task Force to address persistent challenges in the country’s secondary market while advancing reform measures. The initiative was announced as part of SEBON’s capital market policy for the fiscal year 2026/27.
The task force will comprise representatives from SEBON, Nepal Stock Exchange (NEPSE), CDS and Clearing Limited (CDSC), Merchant Banker Association, Stock Broker Association of Nepal, credit rating agencies, and specialized fund managers. According to SEBON, the body will play a crucial role in strengthening the regulator’s internal structure, legal framework, and regulatory capacity amid the rapid expansion of the capital market and the growing number of investors.
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At the same time, Nepal Rastra Bank (NRB) is introducing new standards for loans against share collateral, linking loan limits to the financial strength of the issuing companies. Under the revised framework, shares of financially strong firms will qualify for higher loan ceilings, while weaker companies will face reduced limits. This marks a departure from the current practice where banks and financial institutions (BFIs) provide loans against shares without considering the financial condition of the issuing company.
NRB spokesperson Guru Prasad Paudel said BFIs will now determine loan-to-value (LTV) ratios based on a company’s performance indicators. Firms listed on NEPSE will be categorized as strong or weak. Strong companies—those consistently profitable for the past three fiscal years, distributing regular dividends, and maintaining high net worth—will be eligible for collateral loans up to 70 percent of the average closing price over the past 180 days or the prevailing market price, whichever is lower.
Conversely, companies that have failed to generate consistent profits, have not distributed dividends regularly, and show weak net worth will be classified as weak. Collateral loans against their shares will be capped at lower LTV ratios. Officials believe these measures will safeguard financial stability and promote discipline in the capital market. Together, SEBON’s task force and NRB’s revised lending rules represent a significant step toward systematic regulation of Nepal’s growing securities sector.
