Marginal loans are those loans in which people pledge their shares that they have owned against the bank which will further increase their purchasing power. Every “A” class commercial bank can provide marginal loans for a period of one year after making consideration of the following:

1. Share pledge conformation in the name of bank.
2. Share pledge deed in the name of bank.

Process for valuation of share

Once an individual applies for marginal lending, Banks will evaluate the shares to calculate maximum amount which can be disbursed against the pledge share. The amount is calculated in accordance with the method prescribed in Directive issued by Nepal Rastra Bank.

• The average price of 180 days provided by Securities Board of Nepal or latest (Current) price whichever is low. The bank can provide up to 50% of the calculated amount.

Applicable laws and regulations

• Securities Act 2063.
• Bank and Financial Intuition 2073.
• Civil Code 2074.
• Company Act 2063.
• Asset(Money)Laundering Prevention Act 2008.
• Securities Listing & Trading Regulation 2075.
• Through an act to be treated as a quasi-tort under the law.
• Stock Exchange Operation Regulation 2064.

Note: This write-up should not be considered as an expert legal opinion. This has been drafted only for the purpose of general understanding of the subject matter.

• For Details Please Contact
• Udayan Regmi
• Attorney-at-Law
• Partner
• Associates Hub Pvt. Ltd
• Udayan@ahnlegal.com
• +977-9851048725