NEPSE, CDSL to sign MoU

Nepal Stock Exchange (NEPSE) is all set to sign a Memorandum of Understanding (MoU) with India's Central Depository Services (India) Limited (CDSL) to install software for CDS system in Nepal within this month.

"Nepal government and Indian External Affairs Ministry have given a nod to go ahead for the MoU and the two sides are looking for an auspicious day for the signing," said Shankar Man Singh, general manager of NEPSE. "The CDSL will provide consulting and training services to NEPSE officials besides installing the software after MoU as well as the cooperation agreements are signed between the two sides," said Singh. The CDSL has told NEPSE officials that it would take eight to 10 months to install the software.

The Indian government has already pledged a grant assistance of Rs. 140 million for the software installation. An estimated Rs. 450 million will be required to complete the installation process. The CDS system will replace the existing manual transactions and enable settlement of shares transactions in a scientific and reliable way. Under the existing system, investors have to wait for at least two weeks to get the ownership of shares transferred. According to Singh, the articles of association and memorandum of articles have already been prepared to establish CDS system and the finance ministry has endorsed them recently.

The NEPSE will have 51 percent stake in the company that operates CDS. The banks including the Himalayan Bank, Nepal Investment Bank, Bank of Kathmandu, Kumari Bank, NIC Bank, Standard Chartered Bank, Laxmi Bank and KIST Bank as well as Citizen Investment Trust have also already promised investment in the company.
Source:eKantipur