Tuesday, January 08, 2008

NRB directives to banks: SC refuses to issue stay order

The Supreme Court refused to issue a stay order against directives issued by the Nepal Rastra Bank (NRB) to banks and other financial institutions.A division bench of justices Min Bahadur Rayamajhi and Gauri Dhakal refused to issue the order against the directives that were passed on December 28. The directives will remain in effect till January 29.The directives, issued to various banks, development banks and finance companies, told the latter not to disburse margin-lending loan by keeping securities or stocks as collateral.Challenging the NRB directives, Thamma Lal Sharma had filed a writ petition in the apex court. After the NRB directives, a group of investors halted stock trading at the Nepal Stock Exchange, Sharma said in the petition, adding that the NRB's action will affect investment in the stock market.Following hearing, the bench said there is no need to stop implementation of the directives. Advocate Harishchandra Subedi pleaded on behalf of the writ petitioner, while advocates Thaneshwor Acharya and Prem Prasad Pandey defended the NRB directives.

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