Pledge Loan
pledge loan differs from a standard loan in that the loaned amount is completely backed with collateral from the borrower. A borrower can use their funds, such as a savings account, as collateral to obtain a loan.
pledge loan differs from a standard loan in that the loaned amount is completely backed with collateral from the borrower. A borrower can use their funds, such as a savings account, as collateral to obtain a loan.
Last Updated Date: May 17, 2022
Nepal Bank Limited is the first financial institution of Nepal which was established on November 15, 1937 A.D (Kartik, 30, 1994). It was shaped under the principle of Joint undertaking (Joint project between govt. & regular public). NBL's licensed capital was once Rs. 10 million & issued capital Rs. 2.5 million of which paid-up capital used to be Rs. 842 thousand with 10 shareholders.. It is a national level bank. With the recent Follow-on Public Offer (FPO) offered in 2018, the bank has a share ratio of Government to Public as 51:49 percent. This bank has not provided dividends to shareholders for the last 21 years. It is currently trading at Nepal Stock Exchange with the symbol ‘NBL’. Nepal bank has appointed Civil Capital Market Limited as its share registrar. It focuses on building internet worth and assembly of minimal capital necessities within five years.
A pledge loan differs from a standard loan in that the loaned amount is completely backed with collateral from the borrower. It is a well known fact that the prices of agricultural commodities immediately after harvest, tend to be low compelling the farmers specially the small and marginal farmers with low or no holding capacity, to resort to distress sale. There has been a felt need to provide the farming community with pledge finance to enable the farmers to avail credit when the prices are low and to sell their produce when the prices are favorable. A borrower can use their funds, such as a savings account, as collateral to obtain a loan. pledge loans against the stock after verification of the same. The stock, however, is kept under lock and key of the Bank and the loan disbursed and settled in pro rata basis with the stock pledged and sold. The funds used as collateral then become "frozen" until the loan is paid back in full. Because pledge loans are fully backed with collateral, they are easier to obtain than traditional loans and offer a number of other benefits to borrowers such as:
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