Nepal Rastra Bank (NRB) has issued instruction to banks and financial institutions to bring down the limit of renewal of margin lending by 50 percent.

The decision has been taken to control margin lending in the face of downward trend in share prices.

As per the directives, banks and financial institutions can renew loan of those borrowers who have repaid 50 percent loan.

Furthermore, NRB has fixed limits for investment in shares and debentures for class 'B' and 'C' banks and financial institutions. Class 'B' companies can invest 20 percent of paid up capital per company whereas the limit is 10 percent for class 'C' companies.

Meanwhile, NRB has prohibited financial institutions' boards of directors from using the official letter-pads of the institutions. Chairpersons and directors cannot use official letter-pads for correspondence, NRB said. It has also prohibited non-executive chairpersons from working as chief executive officers, it is learnt. nepalnews.com

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