Margin loan investment by banks and financial institutions surged significantly in the fiscal year 2024/25, led by commercial banks. According to the Nepal Rastra Bank (NRB), total margin loan exposure reached Rs 140.7bn by the end of mid-July 2025, compared to Rs 90.09bn a year earlier. This represents an increase of Rs 50bn (56.17 percent) over the previous fiscal year.

While finance companies and development banks posted moderate growth, commercial banks accounted for a lion’s share of the expansion. Finance companies increased their margin loan portfolio by only 4.27 percent, from Rs 4.15bn to Rs 4.35bn, while development banks saw their margin loan exposure go up by 25.31 percent, from Rs 15.59bn to Rs 19.54bn. In contrast, commercial banks expanded their investment by a whopping 66.05 percent. Margin loan exposure of commercial banks expanded from Rs 70.03bn in mid-July 2024 to Rs 116.8bn in mid-July 2025.

In terms of portfolio, Nabil Bank has the largest margin loan exposure at Rs 16.76bn followed by Global IME Bank (Rs 12.3bn) and Kumari Bank (Rs 10.43bn). Similarly, in terms of growth, Machhapuchchhre Bank recorded the sharpest growth in margin loans with its portfolio expanding by 442.10 percent. The bank’s total margin loans increased from Rs 460m to Rs 2.53bn during the period. Similarly, Nepal SBI Bank’s margin loans grew by 207.15 percent to Rs 610m, up from Rs 200m a year earlier.

Agriculture Development Bank (192.66 percent), NMB Bank (144 percent), Laxmi Sunrise Bank (143 percent) and Kumari Bank (138.41 percent) also saw significant expansion in their margin loan portfolio during the period. Market analysts say improved investor confidence in the stock market  is the main reason behind expansion in margin lending portfolios of banks. Since return from the stock market is higher than interest rates offered by banks, investors are availing themselves of cheaper loans and investing in stocks, one analyst said.