Banks float Rs 7.10 billion on margin type lending
The banks have lent Rs 7.10 billion on margin type lending to the stock market investors.
The central bank, fearing the stock market crash due to margin type lending, had asked a week ago the banks to provide details of their margin type lending.
"The 26 banks have floated Rs 7.10 billion margin type lending," according to the central bank source.
Of the 26 banks, state-owned banks have lent the highest -- as Nepal Bank has floated Rs 1.47 billion and Rastriya Banijya Bank has lent Rs 1.12 billion -- on margin type lending.
Likewise, from among the private sector banks, Himalayan Bank has lent Rs 550 million, Global IME Bank Rs 500 million, Laxmi Bank Rs 240 million, Kumari Bank Rs 200 million, Everest bank Rs 150 million and Nepal Investment Bank Rs 50 million.
As the banks are sitting on a huge pile of cash, the investors have been finding margin type lending a boon that has pushed the Nepal Stock Exchange (Nepse) to as high as over 800 points.
Fearing the crash – like earlier – the central bank has last week sought a detailed information from the banks. The market has, however, reacted to the central banks expected intervention and second quarter closing.