KATHMANDU, May 6: The government has introduced new provisions allowing state-operated pension funds to invest in a wider range of capital market instruments, aiming to mobilize billions of rupees currently lying idle.
Under the new arrangement, the Employees Provident Fund (EPF), Citizens Investment Trust (CIT), and Social Security Fund (SSF) can now invest in mutual funds, private equity, and venture capital funds. The changes were made through the ‘Ordinance to Amend Certain Nepal Acts,’ issued by President Ram Chandra Poudel on the government’s recommendation. The ordinance amended the CIT Act, EPF Act, and contribution-based Social Security Act.
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Until now, these funds were largely restricted to investing in fixed deposits, government bonds, and shares of hydropower companies. With the new provision, the CIT will be able to expand beyond shares of banks and insurance companies to include mutual funds and venture capital instruments approved by the Securities Board of Nepal. Similarly, the EPF, which previously operated only its own collective investment scheme, will now be permitted to participate in external mutual funds and venture capital. The SSF has also been granted authority to diversify its portfolio into private equity and mutual funds.
Officials say the move is expected to generate higher returns for contributors while boosting liquidity in Nepal’s capital market. It is also anticipated to provide institutional investment opportunities for startups and enterprises.
Currently, the EPF manages over Rs 500 billion collected from 578,000 general contributors and 96,000 pension fund contributors. The CIT oversees nearly Rs 300 billion from more than 800,000 Nepalis, while the SSF has accumulated over Rs 102 billion from 2.75 million contributors as of February 2026.
