Margin trading in Nepal: the 30% rule, the margin call, and how a share loan differs

Margin trading (मार्जिन कारोबार) is buying shares with part of your own money and the rest lent by your stockbroker. You put money in first; the broker adds its loan; the shares are bought in a separate margin account and stay there as the broker's security until you sell and repay. In Nepal it runs under SEBON's मार्जिन कारोवार सुविधा सम्बन्धी निर्देशिका, २०८२ (the Margin Trading Facility Directive, 2082), made under section 118 of the Securities Act, 2063 and in force from 1 Falgun 2082 (13 February 2026). It replaced the margin directive of 2074, under which almost nothing happened.

The money you put in first is the initial margin (प्रारम्भिक मार्जिन): at least 30% of the market value of the shares, by section 6(1). After you buy, your margin is the part of the shares' value that is yours: the value, less what you owe, as a share of the value. It must stay at or above the maintenance margin (सम्भार मार्जिन), at least 20% by section 6(5). When a fall in price takes it below, the broker must send you a margin call (मार्जिन कल): a demand to bring it back, in cash or in shares. If you do not, the broker may sell your shares to get its money back.

Why people use it is one word: leverage. With 30% down, Rs 1 of your own buys up to Rs 3.33 of shares. Every 1% the price moves then moves your own money by about 3.3%, up or down, before interest and charges. That is the whole product and the whole risk, and the rest of this page puts rupees on it.

It is not the same as a share loan (शेयर धितो कर्जा), which a bank gives against shares you already own, under Nepal Rastra Bank's rules. People search for the two as one thing; the next section separates them.

Both lend you money with shares as security. They differ in who lends, who makes the rules, what you start with and how a fall is handled. The short version: margin trading lends you money to buy shares you do not yet have; a share loan lends against shares you already hold.

Margin trading is a broker's product. SEBON sets the rules, and NEPSE licenses each broker that offers it. You bring cash, at least 30% of what you buy; the broker lends the rest, up to 70%, on the same day, and only for shares on NEPSE's eligible list. The shares are valued every day at the market price.

A share loan (also called margin lending, मार्जिन प्रकृतिको कर्जा, or share dhito karja) is a bank's or financial institution's product under Nepal Rastra Bank's unified directive. You must first own the shares, bought with your own money; you pledge them through your depository participant; the bank lends up to 70% of their value, where the value is taken at the lower of the last price and the 180-day average. NASA Securities' own margin notice puts the difference the same way: banks want the shares first, brokers lend at the purchase.

The money is often cheaper at a bank: about 5.2%–7.2% a year at two banks' own rate sheets in Kartik 2083, against about 7%–10% at brokers. A broker is faster and lends on the purchase itself. Neither is safer: both sell your shares if the price falls far enough and you do not pay.

The directive is ten pages of Nepali in a PDF on SEBON's site, typed in an old font that search engines and screen readers cannot read, which is why most pages about it repeat two numbers from the news. We converted it and read every section on 5 November 2026. These are the rules, with the section each comes from.

Three things are not in it. There is no cap on the interest: section 13(2) only says the agreement must state the service charge or interest. There is no deadline for meeting a margin call and no 15% sale level: those are in NEPSE's own procedure, मार्जिन कारोबार सुविधा सम्बन्धी कार्यप्रक्रिया, २०८२, and in each broker's agreement. And there is no rule that the call must restore the full 30%: the directive says "the required margin".

The directive asks for two new accounts at your broker, a margin trading account (मार्जिन कारोबार खाता) and a margin demat account (मार्जिन कारोबार हितग्राही खाता), linked to the broker's own margin clearing account at CDS and Clearing. Section 10(7) lets a broker skip the separate trading account if its TMS can run margin from your normal one. NASA Securities, the first to start, asks clients to come in person to one of its four offices with a photo, citizenship and national ID card, the same documents as a normal account (see how to open a demat account).

You sign an agreement that must state, at the least, the initial and maintenance margin, how margin calls work, the interest or service charge, the shares to be bought, a power of attorney (अधिकृत वारेसनामा) over the two margin accounts and a promissory note (तमसुक). The power of attorney is what lets the broker sell without asking you; section 10(6) allows its use only to sell and settle when you do not repay or do not keep the margin, and the broker must report it to NEPSE.

1. 1Check the broker holds a NEPSE margin licence, not only a SEBON broker licence. 31 of 90 brokers had one by mid-June 2026; ask for its licence number.
2. 2Read its terms before you sign: the interest and how it is charged (up front, or only on what you use), the service charge, the minimum facility, the term, the deadline for a margin call and the margin it keeps (it may ask more than 20%).
3. 3Open the margin trading account and margin demat account, with your KYC, and sign the agreement, the promissory note and the power of attorney.
4. 4Deposit the initial margin, at least 30% of what you plan to buy, in cash. Some brokers also take approved shares.
5. 5Buy only shares on NEPSE's eligible list. The broker pays the rest, up to 70%, and the shares go into the margin demat account.
6. 6Watch the margin every day. The shares are valued at the market price each day. Below 20%, expect a margin call; meet it in cash or with A, B or G class shares counted at 60%, by the broker's deadline.
7. 7Sell and repay, or renew. Selling repays the loan and interest from the proceeds; the rest is yours. The facility lasts up to 1 year and may be renewed.

Your own money

Rs 2,00,000

Shares bought

Rs 6,59,000

Broker's loan

Rs 4,61,300

Margin call at

Rs 437.50

Mina has Rs 2,00,000 and buys an eligible share at Rs 500 on margin, with the directive's minimum 30% down. She can buy 1,318 shares, worth Rs 6,59,000. Her 30% is Rs 1,97,700; the broker lends the other 70%, Rs 4,61,300. The buying charges, Rs 2,166.75 (commission at 0.31%, the 0.015% SEBON fee and the Rs 25 DP charge), come from her own money, which leaves Rs 133.25 spare. No company is meant: Rs 500 is a round price.

She holds for 3 months and pays interest at 10% a year, about what NASA Securities charges with its service charge included, the top of the published range: Rs 11,532.50. At 7%, the bottom of the range, it would be Rs 8,072.75. When she sells, the commission, SEBON fee and DP charge come off the sale, capital gains tax at 5% (held under a year) is taken from any gain, the broker takes back its Rs 4,61,300 and the interest, and the rest is hers.

If the price rises 10% to Rs 550, the shares sell for Rs 7,24,900. After Rs 2,380.93 of charges, Rs 3,067.62 of tax, the loan and the interest, she ends with Rs 2,46,752: +23.4% on her Rs 2,00,000. The same Rs 2,00,000 with no loan buys 398 shares and ends with Rs 2,17,488, +8.7%.

If the price falls 10% to Rs 450, the shares sell for Rs 5,93,100. There is no tax, because there is no gain, but the loan and the interest are owed in full. She ends with Rs 1,18,448: −40.8%. With no loan she would have lost 10.6%. The rise and the fall were the same size; the loss with the loan is 1.7 times the gain, because interest and charges are paid either way.

Mina's margin is the value of her shares less the Rs 4,61,300 she owes, as a share of the value. At the start it is 30%. It falls to 20% when the value is Rs 4,61,300 ÷ 0.8, which is a price of Rs 437.50, a fall of 12.5%. That is the rule for anyone who puts in exactly 30%: the call comes after a 12.5% fall, not a 20% fall, because the 20% is measured on the lower value. NASA Securities' own notice gives the same figure: a call "if the value of portfolio falls by 12.5%". If unpaid interest is added to the loan, the call price creeps up a little every day.

Say the price closes at Rs 425. Her shares are worth Rs 5,60,150 and her margin is 17.6%. To bring it back to 20% she must pay Rs 13,180 in cash, which reduces the loan, or pledge A, B or G class shares worth Rs 21,967 at market, because section 7(5) counts them at 60%. NASA asks for it by 11:00 the next day, when the market opens; NEPSE's procedure, as reported, says before the next trading day. Her broker's agreement may ask her to restore more than 20%.

If she does not pay, the broker may sell. NEPSE's procedure, as reported, also lets a broker sell at once when the margin falls below 15%: for Mina, at Rs 411.76, a 17.6% fall. A share may move 15% in a single day since 20 April 2026, so one bad session can take a position from no call to the sale level. Suppose the broker sells at Rs 420 a month after she bought. She ends with Rs 86,725, −56.6%. Without the loan, the same fall would have cost 16.6%, and she would still own the shares if she chose to wait.

All of her money is gone if the price reaches about Rs 359.91, a 28% fall, once 3 months' interest and the charges are counted. Below that she would owe the broker money, which the promissory note lets it claim.

Margin trading pays only when the price rises by more than the interest and the charges, and the interest is certain while the rise is not. In Mina's example the share must reach Rs 512.54 in 3 months for her to get her Rs 2,00,000 back at 10% interest (Rs 509.77 at 7%): a rise of 2.5%. Without a loan the break-even is Rs 503.59, a rise of 0.7%.

The table runs the same position through every move. Read down the right-hand column: the gains grow by a little more than three times, the losses by a little more than that, and below the call price the broker steps in. Paying a margin call does not change what you lose if you then sell at that price; it only puts more of your money in.

• Shares rarely move in straight lines. A share that ends up 10% can fall 15% on the way, and a margin position may be sold at the bottom before the rise. Without a loan you choose when to sell; with one, below the call price, the broker can choose for you.
• Time costs money. Each month at 10% costs Rs 3,844.17 on Mina's loan whether the price moves or not.
• Dividends and bonus shares are not in the table. Bonus shares on margin shares count as collateral automatically under NEPSE's procedure, as reported; how they are priced is in bonus and right shares.

SEBON sets no cap on what a broker charges. Section 13(2) requires only that the agreement states the "service charge or interest". Brokers that launched in September and October 2026 published rates from about 7% to 10% a year, some with a service charge of 0.20%–0.25% on top. How the interest is charged matters as much as the rate: NASA takes it for the whole term up front and does not refund it if you repay early, while KBL and Brilliant say they charge only on the amount you use.

Banks price share loans as their base rate (their cost of funds, worked out each month) plus a premium. From 1 Kartik 2083 (18 October 2026), Nepal Bank's margin lending band was base rate plus 1.00 to 2.50 points on a base of 4.41%, which is 5.41%–6.91%; Everest Bank's individual share loan band was base rate plus 1.00 to 3.00 on 4.18%, which is 5.18%–7.18%. The commercial banks' average base rate was 4.70% in mid-September 2026.

On Mina's Rs 4,61,300 for 3 months, the brokers' range costs Rs 8,073–Rs 11,565; the two banks' bands, Rs 5,974–Rs 8,280. The difference is one reason, news reports say, that broker margin has been slow to take off while bank share loans grew.

Only shares on NEPSE's eligible list can be bought on margin. Section 3 of the directive sets four tests: at least 25 lakh public shares listed, not counting locked-in shares; net worth at least equal to paid-up capital; a net profit in two of the last three years; and at least 2 years since the IPO shares were listed. NEPSE adds that a company must publish its accounts regularly and not be under SEBON's action.

NEPSE's notice of 17 Chaitra 2082 (31 March 2026) lists 123 companies. Every commercial bank is on it; most microfinance and hydropower companies are not. The list is meant to be revised each fiscal year; no revised list for 2083/84 had been found by 5 November 2026, so check NEPSE's notices. If a company is dropped, NEPSE's procedure, as reported, gives brokers 30 trading days to close those positions, or the client must keep a 100% margin.

A company being on the list is not a sign it is a good buy. It means only that it passed four tests of size and profit. This page names no company to buy on margin or otherwise.

Of Nepal's 90 licensed stockbrokers, only those NEPSE has licensed for margin may offer it. The count has moved every month: 31 held licences by mid-June 2026, with letters of intent issued to 24 more (ShareSansar, 18 June); 49 had the mandate by late August, of which 8 had started lending (NEPSE Trading, 25 August); 11 were lending by late September, according to NEPSE (Onlinekhabar, 23 September), and NASA Securities alone had lent about Rs 1.25 arba. More announced launches in October.

Margin trading is not new on paper. SEBON approved a system in 2018 and CDS and Clearing a platform in 2019, but brokers lacked money to lend. NASA Securities started on 20 October 2022, lent to nine investors in its first month and then stopped; brokers said they had no legal way to recover bad loans and could not borrow from banks. The 2082 directive lets brokers borrow up to 4.5 times their net worth, which is what changed.

There is no "best margin trading broker", and this page names none. These are the things to compare, all of which the directive says must be in the agreement or the broker's procedure:

• The licence: NEPSE's margin licence number, not only the SEBON broker number.
• The rate and how it is charged: up front for the term, or daily on what you use; the service charge; any refund if you repay early.
• The margins it keeps: the initial margin it asks (it may be above 30%) and the maintenance margin (it may be above 20%).
• The margin call: how it tells you (SMS, call, email), the deadline, and whether it takes shares as well as cash.
• The sale: at what level it sells without waiting, and in what order it sells your shares.
• The facility: the minimum (Rs 10 lakh at some brokers), the maximum, the term, renewal.
• Where you sign: some brokers require a visit to an office.

A share loan is the older and much larger way of borrowing on shares in Nepal. Banks and financial institutions had about Rs 162.9 arba lent against shares in mid-June 2026, against Rs 76.5 arba in mid-July 2023 (Kathmandu Post, from NRB's figures). You must already own the shares; you pledge them through your depository participant, the bank checks your credit and lends.

How much: up to 70% of the value of ordinary shares and 50% of promoter shares, where the value is the lower of the last price and the 180-day average closing price. Global IME's and ADBL's own pages state it so, "in accordance with" NRB's directive. Since NRB's unified directive of 15 July 2026, as news reported it, a bank may lend up to 80% against shares of companies it scores as sound under its own published product paper, looking at paid-up capital, years listed, profit and dividends, credit rating, compliance and annual meetings held on time. A loan once made is not raised because the price later rises.

The limit per person: since early October 2025 NRB sets no rupee cap; each bank decides by its own risk assessment (ShareSansar and Kantipur, 8 October 2025). The cap had been Rs 25 crore per person across all banks. A news summary of the 2083/84 monetary policy in July 2026 again mentions Rs 25 crore, but it appears to describe the previous year's change, and a later Kathmandu Post column says the limit was "completely lifted". Banks can set their own: Global IME's page still says its maximum for an individual is Rs 15 crore. Ask the bank what applies to you.

Which shares: under NRB's unified directive, as ShareSansar listed it in September 2026, a bank may not lend against shares of a company with negative net worth, one delisted, one that has not finished its audit within a year, one with losses three years running, one less than a year into commercial operation, one with no annual meeting in three years, or one with no trade for 250 days. Shares still in their lock-in can now be pledged.

Worked: Hari owns 400 shares; the last price is Rs 500 and the 180-day average Rs 520. The bank values them at the lower, Rs 500, so at Rs 2,00,000, and lends up to Rs 1,40,000 (Rs 1,60,000 at 80% if the company scores well). If the average had been Rs 450, the value would be Rs 1,80,000 and the loan Rs 1,26,000. A year's interest on Rs 1,40,000 at the two banks' bands is Rs 7,252–Rs 10,052.

1. 1Hold the shares in your own demat (or, at some banks, a close family member's or your firm's).
2. 2Apply at the bank with your citizenship and photos; the bank lists the rest. Some take applications online: Global IME's FLASH lends Rs 5,00,000 to Rs 50,00,000.
3. 3Pledge the shares to the bank through your depository participant; the DP's confirmation of the pledge goes to the bank.
4. 4Sign the loan papers and any personal guarantee; the bank checks that your income covers the loan.
5. 5Pay interest each quarter (Global IME) and repay or renew each year. ADBL lends from Rs 5,00,000, for up to a year, revolving.
6. 6If the value falls below the required margin, pledge more shares or repay part; "in extreme cases", in Global IME's words, the bank sells the pledged shares. Pledged shares cannot be sold until the loan is repaid and the pledge released.

NRB's rules on share loans have moved the market before. Its monetary policy for 2078/79, unveiled on 13 August 2021, limited a person to Rs 4 crore from one bank and Rs 12 crore from all banks together. Five days later, on 18 August 2021, NEPSE closed at its record, 3,198.60, and then fell: its month-end close reached 1,853.76 in September 2022, 42% below the record. Investors' groups blamed the loan limit; deposit rates also rose to 10–12% in 2022, which drew money out of shares. The fall had more than one cause.

The limits were then eased step by step and removed in October 2025. Bank share loans grew again, and the market still did not move in a straight line: NEPSE was 2,970 on 25 March 2026 and 2,547 on 14 July 2026, a fall of 14.2% in under four months, more than the 12.5% that brings a margin call on a fully margined position.

Margin trading turns a fall in price into a bigger fall in your own money, adds a cost that is certain, and hands someone else the right to sell your shares at a time you did not choose. Each of these is in the numbers above.

Who it may suit, and who it does not. This is not advice about you; these are the conditions under which borrowing to buy shares is more or less likely to go wrong. It is less likely to go wrong for someone with spare cash beyond the deposit to meet a call, who borrows well below the maximum, who watches the account every trading day and who could lose the deposit without harm to their household.

It does not suit money needed within the year; borrowed money (a loan to fund the deposit doubles the leverage); savings for fees, a house or a wedding; anyone abroad who cannot answer a call before 11:00 Nepal time (see investing in Nepal from abroad); or anyone new to shares. Learn the market first: share market in Nepal for beginners.

The alternative is time. A regular investment in a fund, with no loan, cannot be sold from under you; SIP in Nepal and the SIP calculator show how it works, and the pillar, how to invest in Nepal, puts shares, funds, deposits and gold side by side. The risks of margin, one by one:

• Losses are multiplied. With 30% down, a 10% fall cost Mina 41% of her money in three months.
• The call comes early. A 12.5% fall, not 20%, brings it at the minimum deposit. A share can move 15% in one day.
• The broker sells, not you. If you cannot pay the call by the deadline, the shares are sold at that day's price, often near a low, and the loss becomes final.
• You can lose more than you put in. If the price gaps down day after day and buyers vanish, the sale may not cover the loan; you owe the rest under the promissory note. For Mina that point is about Rs 359.91.
• Interest is owed whatever happens, and at some brokers it is paid up front and not refunded.
• Rules change. NRB's 2021 limit on share loans was announced five days before the market's record. SEBON, NEPSE and NRB can each change margins, lists or limits.
• Concentration. Margin money tends to go into a few popular shares, so they can fall together when many calls come at once.
• Charges on borrowed money. Commission is paid on the whole trade, so margin multiplies charges too.