Margin lending in Nepal: buying shares with borrowed money.

The short answer

Margin lending lets you buy shares partly with your broker’s money, using the shares as collateral. Under the Margin Lending Directive 2082, effective 13 February 2026, you fund at least 30% of a Class A purchase yourself, 40% for Class B and 35% for other eligible scrips. Only brokers with Rs 20 crore paid-up capital may offer it.

What it is, in plain terms

You want Rs 1,00,000 of a share and have Rs 30,000. A broker offering margin can lend the rest, holding the shares as security, and charges interest on the loan.

If the share rises 10%, your Rs 1,00,000 becomes Rs 1,10,000. On Rs 30,000 of your own money, that Rs 10,000 gain is a much larger percentage return than 10%.

If it falls 10%, exactly the same arithmetic runs the other way, and you still owe the full loan plus interest. Leverage does not distinguish between directions.

What changed in 2026

SEBON approved the Margin Lending Directive 2082 in February 2026 and it took effect on 13 February 2026, replacing the Margin Trading Directive 2074.

The parts that matter to an investor:

• Initial margin by class. At least 30% for Class A companies, 40% for Class B, 35% for other eligible scrips. Better-regarded companies require less of your own money.
• Broker qualification. Minimum paid-up capital of Rs 20 crore, plus clearing and depository membership. Roughly 60 of about 90 brokers meet the capital bar.
• Broker funding limits. A broker’s total borrowings and unsecured loans cannot exceed 4.5 times its net worth.
• Client money is ring-fenced. A broker may not use one client’s funds or securities to finance another client’s margin trades.

That last rule is the quiet one, and it is the most important protection in the directive.

The margin call

This is the mechanism people underestimate, so it is worth spelling out.

Your equity is the value of the shares minus what you owe. When prices fall, the loan stays the same size and your equity absorbs the whole drop. Below a threshold, the broker issues a margin call: add money, or reduce the position.

If you do neither, the broker can sell your shares to recover the loan — at whatever the market offers that day, which in a falling market is not a price you would have chosen. You do not get to wait for a recovery, because it is no longer entirely your decision.

NEPSE also applies a 15% daily price limit, which means a sharp move can hit its limit and leave sellers unable to exit at all that session. Read the circuit breaker guide before you use leverage.

Who this is genuinely not for

If you are new to the market, if the money is money you need, or if you would struggle to fund a margin call within a day, margin is not a tool to experiment with. The people who get badly hurt are rarely the ones who understood the mechanism and chose it anyway.

Practise the mechanics without the money first — Punji’s practice arena charges the real fees on every order, so a result there means something.

Common mistake to avoid

Counting the interest and forgetting the fees. A margin position pays broker commission, the SEBON fee and the DP charge on the way in and again on the way out, plus capital gains tax on any profit, plus interest for every day the loan is open. A position needs to move meaningfully before it breaks even. Run the real numbers in the calculators first.

Pro tip

Ask your broker for the specifics in writing before you borrow: the interest rate, the maintenance margin, how much notice you get on a call, and exactly when they are entitled to sell you out. These vary between brokers within the SEBON framework, and they are the terms that decide what actually happens to you on a bad day.

SEBON has published further consultation on margin lending, securities lending and short selling since the directive took effect, so confirm the current position rather than relying on any article, including this one.