Nepal Rastra Bank Cuts Minimum Share Holding Period to 45 Days, Keeps Countercyclical Buffer at Zero
Summary
Nepal Rastra Bank has cut the minimum holding period for banks’ share and debenture investments from six months to 45 days and kept the countercyclical capital buffer at zero percent for fiscal year 2083/84. The central bank has also tightened investment governance, reporting and risk-management requirements for financial institutions.
Key Points
- Nepal Rastra Bank has reduced the minimum holding period for banks and financial institutions’ investments in shares and debentures from six months to 45 days.
- The central bank has kept the countercyclical capital buffer at zero percent for commercial banks in fiscal year 2083/84.
- Banks must now follow stricter investment policies, daily mark-to-market valuation, stress testing and separate monthly reporting for banking book and trading book holdings.
- The revised framework aims to give banks more flexibility in portfolio management while maintaining safeguards against speculative trading.
