Nepal Rastra Bank has abolished the limit of Rs 20 crore for institutional loans on share mortgages. Governor Mahaprasad Adhikari announced the monetary policy for the current financial year on Friday and said that the loan limit for the institutional sector has been canceled while keeping the personal loan in the share loan.

According to the Rastra Bank, the limit of loans given to institutional investors in share securities has been removed as margin trading is not easy and systematic. Although the limit for institutional has been removed, the limit of share loans to individual share investors has been kept unchanged by the National Bank. The maximum share loan limit for individuals is Rs. 15 crores. "In the situation where margin trading cannot be done easily and systematically, the existing maximum limit of 200 crores of loans provided by banks and financial institutions in the form of margin securities for institutional investors established with the main purpose of investing in the capital market will be abolished," the monetary policy states. Nepal Rastra Bank has so far given consent to 34 securities brokerage companies to encourage the concept of margin trading by gradually reducing the direct loan investment from banks and financial institutions in the securities market. 

Radha Pokharel, president of the Nepal Capital Market Investors Association, said that the removal of institutional restrictions on the stock market will help the economy to run. She said that although it was suggested to remove both institutional and personal limits, only the institutional limit was removed. The stock market is kept within a boundary. We said that personal and institutional borders should be opened,' she said, 'the risk burden was 125 percent. There was a demand to increase it to 100 percent, but it was not addressed.

Similarly, the limit of the Regulatory Retail Portfolio (RRP) has been increased from 2 crores to 2.5 crores. Bhesraj Lohani, president of Nepal Real Estate and Housing Development Federation, said that even though the limit to be counted in the regulatory portfolio has been increased, real estate has not been addressed. In case of housing loan up to 50 lakhs in real estate, the monthly installment income ratio is 60 percent. At the present time, the federation demanded that it should be increased to at least 80 percent. Even though the risk weight of real estate loans has been brought down from 150 percent to 125 percent, it should be increased to 100 percent, according to the federation. The monthly installment income of loans taken by general real estate businessmen and project-based businessmen is 50% and 60% respectively, and the federation has been demanding that it should be increased to 80%. He said that although suggestions were made about the mentioned loan income ratio, monthly installment income ratio, risk weight etc., it was not mentioned in the monetary policy. "Households were targeted and not included in the current financial year, our demands were not met," he said, "including housing and others, the overall amount was increased from Rs. 2 crores to Rs. 2.5 crores." The main issue was not addressed.'