The recent NRB direction can affect those banks which are actively engaged in the capital market.
The central bank, however, has not barred banks from making long-term investments in the market thus the direction may not significantly affect their income.
A view is that the direction may affect the share price of microfinance companies for a period. However, as per some investors, NRB has given eight months period to sell the shares, thus, there will not be immediate selling pressure.
NRB has asked BFIs to sell the microfinance shares by mid-January so, they are not bound to sell their shares immediately.
As per Bhuwan Dahal, Chairman of Nepal Bankers Association, the NRB move might be directed to bring correction in the stock market due to the huge share price of microfinance companies.
He said that the move has been taken to encourage banks to invest in long-term investments based on the company's fundamentals rather than making short-term investments on speculation.
In the last year, the share price of microfinance companies has risen sharply. The share price of few companies has doubled in the past year. Similarly, the sub-index of microfinance companies has increased by 130 percent in the current FY. The sub-index which stood at 2438 points by the end of the last FY, has reached 5626 points as of last Tuesday.
According to Hemant Basyal, a stock market analyst, it would be difficult to predict the effect of the direction without determining the actual holding of microfinance shares by BFIs. He also said that it would not have much impact on the market.
If BFIs have a large holding of microfinance shares, they will have to sell it by mid-January which can increase the supply a bit, but if there is a smallholding, it will not have much effect, he said.
Similarly, Manoj Gyawali, DGM of Nabil Bank said that the direction might stop the speculative income of some banks. As the central bank barred BFIs from investing in shares of other BFIs, there would not be additional investment in the capital market given that the dividend of companies other than microfinance companies and BFIs are very low.
He added that the directive will have little effect on the balance sheet of the banks as the banks only invest a small portion in the capital market.
