Services of Nagarik Lagani Kosh

Nagarik Lagani Kosh CIT Services in Nepal

Nagarik Lagani Kosh, also known as Citizen Investment Trust (CIT) or नागरिक लगानी कोष, is an autonomous body connected with retirement savings, institutional fund management, investment financing, and capital market services in Nepal. Established under the Citizen Investment Trust Act, 1990/91 (2047 BS), CIT began operations in January 1992 and has its head office at New Baneshwor, Kathmandu.

Its service structure covers employees, organized institutions, general savers, Nepalis working abroad, public service employees, and capital market participants through different savings, insurance, pension, investment, and fund management programs.

Quick Service Map

How CIT Services Are Organized

CIT services can be understood through three main functions: saving mobilization, investment and financing, and capital market services. Saving mobilization includes retirement schemes, pension funds, gratuity funds, insurance funds, Employee Savings Growth Retirement Fund, unit and mutual fund schemes, and Investor’s Account schemes.

Investment and financing services include investment in corporate shares, debentures, and government securities. CIT also provides term loans, bridge finance to corporate bodies, and credit for purchasing shares. Its capital market services include trustee services, debenture trustee services, escrow agent services, custodian services, corporate finance services, public issue management, underwriting, market making, and consultancy services.

Services for Employees

Employee Savings Growth Retirement Fund

The Employee Savings Growth Retirement Fund is designed for civil servants and employees working in government, semi-government, or non-government organized institutions established under prevailing law. Participants may receive a loan facility of up to 90 percent of their saved amount after completing one fiscal year, or 365 days, from the date they begin saving.

The program also includes housing-related facilities. A participant may receive a housing loan of up to Rs 10 million against land and property collateral for private house construction, house purchase, flat purchase, floor addition, house repair, retrofitting, house decoration, and interior works. A loan facility of up to Rs 7.5 million is available for land purchase. If both husband and wife are participants, the housing facility may reach up to Rs 14 million.

Other participant facilities include a collateral-backed loan of up to Rs 2.5 million for house repair, reconstruction, refurbishment, and decoration, and an easy loan of up to Rs 5 million against land and property collateral for urgent economic, social, cultural, and family-related needs. Participants receive interest and additional returns on savings. Accident-related disaster relief of up to Rs 200,000 and funeral expense support of Rs 30,000 are also included in specified cases.

Under the Income Tax Rules, 2002/03 (2059 BS, Fifth Amendment), tax exemption is available up to Rs 500,000 annually or one-third of taxable income, whichever is lower.

Services for Organized Institutions

Investor Retirement Plan

The Investor Retirement Plan is operated through the Investor Account Scheme. It manages amounts collected under long-term liability headings such as employee welfare fund, medical treatment expenses, insurance fund, accumulated leave, home leave, sick leave, benevolent fund, anniversary fund, and similar institutional funds.

When participating institutions enroll employees individually, participants may receive loans of up to 80 percent of the deposited amount. They may also receive housing, easy, and vehicle loans similar to other participants. The scheme also provides additional returns based on annual profit in addition to interest earned on savings.

Gratuity and Pension Plan

The Gratuity and Pension Plan supports government, semi-government, non-government bodies, and organized institutions in managing gratuity amounts contributed as long-term liabilities. The scheme is connected with gratuity payment to working employees at the time of retirement at the request of the concerned institution.

Deposits under the gratuity scheme may be made on either an individual or institutional basis. CIT invests the deposited gratuity amount in designated areas according to its investment policy, and the interest or other income earned is deposited either into the employee’s personal account or the institution’s account. The interest or income received each year is capitalized, and participants are entitled to additional returns based on annual profit.

Services for Public Service Employees

Life Insurance Fund for Public Service Employees

The Life Insurance Fund for Public Service Employees collects amounts deducted from the remuneration of civil servants, teachers and staff of community schools, soldiers and staff of the Nepali Army, employees of Nepal Police, employees of Armed Police Force Nepal, and employees of the National Investigation Department. An equal amount is added by the government for periodic life insurance in Nepal.

From July 17, 2018 (1 Shrawan 2075 BS), CIT has been collecting insurance premiums and paying the collected insurance premium to the National Insurance Institute for the following year.

Services for Individual Savers and Nepalis Abroad

Citizen Pension Scheme

The Citizen Pension Scheme allows participation by Nepali citizens, non-resident Nepalis, and Nepali citizens working in foreign employment. A participant may join the scheme by depositing a minimum monthly amount of Rs 500. Additional deposits may be made in amounts divisible by 10 according to the participant’s capacity.

After reaching the age of 60, a participant may receive a monthly pension according to the rules under the pension system. A participant who does not wish to receive a pension may receive a lump-sum refund after completing the fixed participation period.

Citizen Unit Scheme

The Citizen Unit Scheme is operated for general savers. It collects small amounts from small and medium-level investors, manages the collected capital through investment activity, and distributes the return earned from that investment to participants.

The sale of units issued under this scheme remains open at all times. Nepalis working in foreign employment may also participate in the scheme.

Nepal Agricultural Research Council Insurance Fund

The Nepal Agricultural Research Council Insurance Fund deducts a prescribed amount from the monthly remuneration of employees of the Nepal Agricultural Research Council. An equal amount is added on behalf of the Council and deposited into the fund.

The fund invests the deposited amount and arranges insurance coverage for Council employees from that investment. It also provides post-retirement and social security-related facilities for participants.

Investment and Financing Services

CIT invests in corporate shares, debentures, and government securities. It also provides term loans, bridge finance to corporate bodies, and credit for purchasing shares. These services connect collected savings with investment management and financing activity.

Its investment objectives include sectors such as hydropower, infrastructure development, productive sector, tourism and export promotion, and capital market instruments. Its working policy also connects investment decisions with the nature and degree of risk attached to each fund.

Capital Market Services

CIT provides several capital market services, including trustee services, debenture trustee services, escrow agent services, custodian services, corporate finance services, public issue management, underwriting and syndication of underwriting public issues, market making of corporate and government securities, and consultancy services.

CIT is also engaged in the purchase and sale of shares and debentures through the secondary market. It provides merchant banking services through investment in the securities of different institutions and is active in the share capital market through its subsidiary company, Citizen Stock Dealer.

Fund Collection, Investment, and Capital Structure

By the end of Poush of the stated fiscal year, CIT’s savings mobilization balance, including land, stood at Rs 294.65 billion. Its share capital stood at Rs 6.8057 billion, and total investment stood at Rs 267.87 billion.

Its investment distribution included 9.15 percent in Government of Nepal securities, 48.06 percent in fixed deposits, 5.91 percent in term lending instruments, 21.74 percent in participant loans and housing loans, and 12.14 percent in shares and securities of organized institutions.

CIT’s capital structure includes authorized capital of Rs 8 billion, issued capital of Rs 8 billion, and paid-up capital of Rs 6.80 billion. Its share ownership is divided among the Government of Nepal, National Insurance Institute, Nepal Stock Exchange, other banks and financial institutions, and the general public.

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