Banks and Financial Institutions Need to Hold Shares and Debentures for Only 45 Days
In an amendment to the Unified Directive, 2082, Nepal Rastra Bank has allowed banks and financial institutions to hold investments in shares and debentures for a minimum of 45 days. Previously, such investments had to be held for six months. Additionally, the countercyclical buffer for commercial banks for fiscal year 2083/84 has been set at zero percent.
Kathmandu — Nepal Rastra Bank has made an arrangement allowing banks and financial institutions to hold investments in shares and debentures for a minimum of only 45 days. This provision was introduced by amending the Unified Directive, 2082, issued for 'A', 'B', and 'C' class banks and financial institutions.
According to the new arrangement, when banks and financial institutions invest in shares and debentures of organized institutions that have already sold shares to the general public and are listed on the securities exchange market, they need to hold them for at least 45 days.
Previously, banks and financial institutions were required to hold investments in shares and debentures for at least 6 months. Likewise, the provision prohibiting short-term investments in shares and debentures of organized institutions remains unchanged.
Similarly, the countercyclical buffer for commercial banks for fiscal year 2083/84 has been set at zero percent.
On the other hand, Nepal Rastra Bank has arranged that banks and financial institutions, while investing in instruments such as government securities, Nepal Rastra Bank bonds, shares, and debentures, must implement a clear policy and procedure approved by their own board of directors to minimize speculation risk.