Kathmandu. The Banking Sector Reform Suggestion Task Force has recommended the banks and financial institutions (BFIs) Act to convert promoter shares into ordinary shares.

Nepal Rastra Bank (NRB) The task force formed under the coordination of Rewat Bahadur Karki has given such a recommendation. The task force has suggested to take necessary initiatives for issuing IPO as per the decision of the Government of Nepal, Council of Ministers in the fiscal year 2071/72 as per the provision that the fully government Rastriya Banijya Bank should be made 30 percent public sector as per the provision of the Bank and Financial Institution Act.

It will also support the Securities Board of Nepal (SEBON) in developing various types of bond markets, including green bonds. Similarly, in the case of complaints that small capital companies are not related to share price returns

help the Securities Board to promote financial literacy.

The central bank has suggested that the representatives should be recalled by making alternative arrangements as there is a conflict of interest in the representation of directors in NEPSE. It has been suggested that commercial banks should give priority to margin loans through brokers by following the world’s best practices for the flow of credit in the capital market.

After fixing the sectoral limit on share loans, all other arrangements will be made by the banks and financial institutions themselves. The committee has suggested facilitating through banking and foreign exchange policy to bring NRNs into the second market without adversely affecting the Nepali investors.

In the past, the capital gains tax for Nepalis and NRNs was 5 percent, but a few years ago, it was made 7.5 percent for Nepalis and 25 percent for NRNs. The government has suggested taking initiatives to make it at par with Nepali i.e. 7.5 percent.

The rules will be based on the Regulatory Adjustment Framework of the Basel Committee on Banking Supervision.