NRB increases limit on margin call

Nepal Rastra Bank, through its Unified Directives-2071 has increased the limit on margin call. It's been anticipated positively by stocks market.According to the new directive, marginal call up will not be needed up to 1.5 times of the security coverage.

When price of securities is enough to cover 1.5 times of the loan issued against it, Development Banker's association is against of making margin call.

What happens with this new margin call limit?
The new limit for margin call allows share investors to get loan package and there's no necessary margin call even if the price of scrip falls by 10 percent.

Now the BFIs can issue a margin call to a borrower to meet the required margin within seven days only if the price of scrip goes beyond 1.5 times of the security coverage.

Meanwhile, the central bank has become more flexible to promoter shareholders of a listed company by allowing the promoter/ promoter group to file candidacy for public director as well. Promoters can fight for public directors, too.

When BFIs have been asked to convert more of their promoter shares to ordinary shares, NRB has stated such provision.