The capital market regulator has awarded license to Siddhartha Bank to establish Siddhartha Mutual Fund.
Siddhartha Bank's subsidiary Siddhartha Mutual Fund is the first mutual fund to obtain the license from Securities Board of Nepal (Sebon) based on Mutual Fund Regulation 2067. The commercial bank's subsidiary had applied for the license a month ago.
The bank is planning to launch different mutual fund schemes worth Rs 1 billon. It will work as the sponsor while its merchant banking subsidiary will act as the asset management company as per the regulations.
There are three more commercial banks that are waiting for Sebon's green signal to start mutual funds. NMB Bank, Nabil Bank and Laxmi Bank's merchant banking subsidiaries have also applied for the license to operate mutual funds.
The regulations require the sponsor of the mutual fund to have minimum paid up capital of Rs 1 billion and have been in existence for last five years and be earning net profit from last three years among others, making the commercial banks the most suitable entity to start the business.