January 28: Citizens Investment Trust (CIT) is all set to increase its investment in the capital market through a subsidiary company. Finance Minister Yuba Raj Khatiwada confirmed that the government is making necessary preparations to this end.
Speaking at the Finance Committee of Lower House of Parliament on Monday (January 27) to discuss on the bill to amend CIT Act 2047, Minister Khatiwada said that the CIT will play a role of “market maker” in the capital market through a subsidiary company.
“CIT is raising its capital to Rs 3 billion for this purpose,” said Khatiwada.
Finance Committee member Dibya Mani Rajbhandari raised objections to the provision which requires the paid up capital of CIT to be just 3 billion and urged the government to increase it up to 8 billion.
He argued that the CIT has come under the purview of Nepal Rastra Bank and has not turned int a profit-oriented institution. Therefore, its paid-up should be raised on par with the commercial banks, he said.
Finance Minister Khatiwada dismissed such claim and said CIT is not a profit-oriented institution but assures security of the invested amount.
He said that the Social Security Fund, Employee Provident Fund and CIT all ensure social security so the government may integrate all three into one in the future.
The bill also proposes changing the structure of the CIT.
As per the new proposal, the government of Nepal will have 23.34 percent stake at CIT while the stake of Rastriya Beema Sansthan will be 31.55 percent. Likewise, Nepse (10 percent), BFIs (20 percent) and the general public (20 percent) will also have to follow new criteria to maintain CIT’s share.