India has been helping develop infrastructure in Nepal, though it is the first assistance for the development of capital market, said deputy chief of mission of Indian Embassy in Kathmandu Jaideep Mazumdar during the cheque — worth Rs 49.60 million — handover ceremony here in the Nepal Stock Exchange (Nepse) today.
Indian government is happy to hand over the last installment of technical assistance for the development of CDS and Clearing Ltd (CDSC), he said, adding that CDSC will help boost Nepali stock market through dematerialised stocks from the current paper-based stocks. "India will continue assisting development of capital market, if Nepal wishes."
India had promised to provide Rs 147.2 million technical assistance — in three parts including consultation, software and training — for the Central Deposit Service and Clearing Ltd (CDS and Clearing Ltd) on January 15, 2010.
The operation of CDSC — that aims to provide centralised depository, clearing and settlement services — will help develop the domestic capital market enhance efficiency that would boost investors' confidence," said chairman of Nepse Dr Jiba Nath Dhital, while receiving the assistance.
The central depository will replace the current practice of holding and moving the scrip of quoted shares physically with electronic book entry system.
The subsidiary of Nepse, CDS and Clearing Ltd will function through a network of Depository Participants (DPs), who interact with investors. The system has the clearing system for clearing members of Nepse for settlement and for issuers and RTAs for demat and shareholder's functions.
Among the 214 listed companies at the Nepse, CDSC has currently registered six companies for dematerialisation of their shares, awarded licence to seven depository participants (DPs), whereas 15 companies are in pipeline to dematerialise their stocks, and two DPs are waiting to get licence, according to CDSC.