5 suggestions of the Investors Association in the Monetary Policy, ‘Demand to make the banking sector a mechanism to bring back the profit of NRNA from the ease of trading in the secondary market’
लगानी न्यूज
. The Share Investors Association of Nepal has submitted recommendations for the monetary policy for the coming fiscal year 2083/84. The association has presented a 5-point recommendation on the monetary policy.
The association has suggested that banks and financial institutions should be given more freedom to invest in the secondary market, review the investment limit, lock-in period and other regulatory restrictions currently applicable to the banks and financial institutions in the secondary market and provide flexibility according to the market situation.TAG_OPEN_div_26
} The association said, “Encouraging institutions with sufficient capital, liquidity and risk management capacity to invest in the market judiciously will increase institutional participation in the market, expand transaction liquidity and contribute positively to price stability.” ’
Similarly, the second suggestion of the association has demanded improvement in the provision related to dividend distribution of microfinance institutions.TAG_OPEN_div_22 Instead of applying the same standard to all microfinance institutions, the association has said that a flexible policy should be adopted in the distribution of dividend on the basis of financial health, capital adequacy ratio (capital adequacy ratio), non-performing loans, profit and good governance.
} Similarly, providing an opportunity to distribute appropriate dividends to financially sound institutions and meeting regulatory indicators will increase investor confidence and attract more investment in this sector.
The third point of the association has demanded that the share mortgage loan system should be made risk-based. The association has demanded that the existing uniform loan system be modified and ‘risk-based margin lending’ system be implemented. According to the association, the loan-to-value ratio will be effective on the basis of the company’s financial condition, market capitalization, liquidity of the transaction and risk level. According to the association, this will promote investment in quality companies, control unnecessary risks and further strengthen the financial system.
Similarly, the Association has demanded to make arrangements to ease the process of entry and exit of investment for Non-Resident Nepalese on point four. “Clear, simple and credible provisions should be made for the NRNs to easily invest in Nepal’s capital market and to take their investment and profit abroad through a legitimate ‘repatriation mechanism’ when necessary,” he said. It will play a significant role in bringing in foreign currency, increasing foreign investment and making Nepal’s capital market competitive at the international level. The association said.
Similarly, the association has demanded policy facilitation for the active mobilization of institutional funds. Necessary policy arrangements should be made for the more active mobilization of Employees Provident Fund, Citizen Investment Trust, Social Security Fund and long-term funds of insurance companies in the capital market with clear standards for risk management. With the participation of such institutional investors, long-term stability in the market, adequate liquidity and healthy investment culture will be developed. The association said.
प्रतिक्रिया दिनुहोस्