Nepal Rastra Bank has cut the minimum holding period for banks' investments in listed shares and debentures from six months to 45 days, and set the counter-cyclical capital buffer at zero percent for FY 2083/84. The changes arrive in Circular No. 3 (Ka, Kha, Ga) 2083/84, issued by the central bank's Bank and Financial Institution Regulation Department and posted on NRB's website on September 24, 2026. The circular amends the Unified Directive 2082 that governs A, B and C-class banks and financial institutions. This is a genuine policy move, and it deserves a careful reading before anyone prices it in.
The 45-day rule is the change equity investors will feel first. Under the amended Directive 8/082, banks and financial institutions may invest in the shares and debentures of listed organized institutions only for periods exceeding 45 days. The provision it replaces required a holding period exceeding six months. In practice the old floor made active equity trading by banks nearly impossible; a bank that could not sell for half a year could not run a trading book. The new floor changes that arithmetic. One brake stays in place, in the circular's own words: short-term speculative investment in shares and debentures through any arrangement remains prohibited, and the investment policy must spell out how speculative risk is contained.
The second number matters to bank balance sheets rather than to the market directly. The circular states that commercial banks must maintain the counter-cyclical buffer under the Capital Adequacy Framework 2015, and fixes that buffer at zero percent for FY 2083/84. A zero buffer means banks need not lock up additional capital against system-wide credit risk this fiscal year, which leaves more of their existing capital free for lending and other permitted uses. It is a quiet easing, and it is worth naming plainly: the holding period change opens a door, while the buffer change removes a cost.
Permission arrives with plumbing. The amended directive now requires every institution to maintain a board-approved investment policy and procedure that classifies instruments into a banking book and a trading book, defines acceptable and unacceptable investments, sets the trading strategy with risk appetite and limits, and fixes take-profit and stop-loss triggers. The trading book must be marked to market daily. Two new monthly reporting formats have been added, one for the banking book and one for the trading book, each capturing the company, the instrument, the investment and sale dates and amounts, and the resulting profit or loss. The circular also requires arrangements to avoid conflicts of interest where subsidiary companies, major shareholders or risk-taking officials are involved in investment decisions.
The attribution is worth recording because this is where rumors usually start. The circular carries the reference बै.वि.नि.वि./नीति/परिपत्र/०३/०८३/८४, is signed by Executive Director Ramu Paudel, and is dated Bhadra 8, 2083. The full Nepali text sits on NRB's circulars archive; there is no English summary on the site. Nothing in the document compels a bank to buy a single share. It permits and supervises. Whether the 45-day window translates into actual equity demand depends on each bank's risk appetite and how it judges the trade-off between running a trading book and its core lending business.
For investors the honest meter is the new monthly disclosure. When the banking-book and trading-book investment reports start arriving, they will show whether this circular moved money or merely moved a rule. Until then, the policy is in force and the positions are not yet visible. Watch the filings, not the commentary.
This article is research and education, not investment advice. It summarizes Nepal Rastra Bank's Circular No. 3 (Ka, Kha, Ga) 2083/84 amending the Unified Directive 2082; for the full text, see the original circular on nrb.org.np. Nothing here is a recommendation to buy or sell any security.