How to Dematerialize Old Physical Share Certificates in Nepal

Every Dashain, someone in a Nepali household opens an old steel trunk and finds them. Share certificates, printed on thick paper with a company seal, issued to a parent or grandparent in the 2000s. Sometimes the company still exists. Sometimes it merged into a bank with a different name. Usually nobody knows what the paper is worth, or whether it is worth anything at all.

It almost always is. But it is worth less every year you leave it in the trunk. If you want to dematerialize physical shares in Nepal, the process itself is not hard. A Demat account, one form per company, and a trip or two to a depository participant. What makes people fail is not the form. It is the paperwork that has drifted out of sync over a decade: a name spelled differently on the certificate and the citizenship card, a signature that no longer matches the registrar’s specimen, a holder who has died, a company that no longer exists under that name.

Our position is simple. Paper shares are not a safe store of value sitting quietly until you need them. They are a slowly decaying claim. Dividends go uncollected and eventually leave your reach, bonus and rights shares cannot reach you, and every year adds friction to the paperwork. Dematerialize now, and fix the records before you file the form, not after it bounces.

Why paper shares stopped being tradable

Nepal’s market went paperless in stages. The Securities Board of Nepal (SEBON) launched Demat share transactions on April 15, 2014. CDS and Clearing Limited (CDSC), the NEPSE subsidiary that runs the central depository, then made Demat transactions mandatory for all listed companies from January 15, 2016 (Magh 1, 2072 BS). Commercial and development banks had been required to go paperless earlier, in August 2015, the Post reported at the time.

The scale of the leftover paper was large. When the rule took effect, CDSC said only 170 of the 239 listed companies had dematerialized their shares, and SEBON suspended trading in 69 companies that had not complied. CDSC’s then chief executive, Dev Prakash Gupta, estimated that about 1 billion shares, including promoter shares, still remained to be dematerialized, according to the same Kathmandu Post report.

The consequence today is blunt. NEPSE trades only Demat shares. A paper certificate cannot be sold through a broker or receive corporate actions electronically. Until you convert it, it is a claim on the company’s register and little else.

What “dematerialize” actually means

Dematerialization (abhautikikaran in Nepali) is the conversion of a physical certificate into an electronic balance in your Demat account. The paper is surrendered and canceled. In its place, the company’s share registrar (the registrar and transfer agent, or RTA, that keeps the shareholder register on the company’s behalf) confirms that you own a given number of shares, and CDSC credits those shares to your beneficial owner ID (BOID).

Three parties do the work:

Your depository participant (DP). The bank’s capital arm or broker where your Demat account sits, such as a NIBL, Nabil or Kumari capital subsidiary. It accepts your form and certificates.
The share registrar (RTA). It checks your certificate against the register and your signature against the specimen on file.
CDSC. It routes the request and credits the confirmed shares to your account.

Once the shares are in your account, they appear in Meroshare alongside anything you bought on the secondary market or received through an IPO. If you have never opened a Demat account, start with our guide to opening a Demat and Meroshare account. You cannot dematerialize anything without one.

The real cost of leaving certificates in the trunk

The case for acting now rests on three things that happen whether or not you look at the certificates.

Cash dividends that slowly leave your reach

Companies now pay cash dividends straight into bank accounts linked to a BOID. Unilever Nepal, for example, told shareholders in October 2020 that it would deposit cash dividends directly through the interbank payment system, and that investors would need to dematerialize their shares and verify their bank details in their BOID to receive them, according to ShareSansar.

If you hold paper, your dividend does not vanish immediately. It sits with the company or its registrar as unclaimed. But that window closes. In a 2019 notice reported by ShareSansar, Nepal Credit and Commerce Bank reminded shareholders that dividends remaining unclaimed for five years would be transferred to the investor protection fund as required by law. A family that has ignored a certificate since 2016 may already have lost some of the oldest dividends attached to it.

Bonus and rights shares that cannot reach you

Bonus shares and rights shares are now credited electronically to Demat accounts. If your holding is still on paper, there is no BOID to credit. Companies routinely publish notices asking non-Demat shareholders to dematerialize so bonus shares can be credited. Rights are worse, because they come with a subscription deadline. Miss the window because your shares were not in a Demat account, and the right is gone. You are diluted, and you were never really given the choice.

Paperwork that gets harder every year

This is the cost people underestimate. A certificate issued in 2006 carries the holder’s name and specimen signature as they were then. Since then, the holder may have a new citizenship card with a different spelling, a different signature, or may have died. Each creates a mismatch the registrar must resolve before confirming the shares, and they pile up with time.

How to dematerialize physical shares in Nepal: the step-by-step process

Here is the standard route. Your DP may have its own form layout, but the sequence is the same.

Gather every certificate and sort them by company. You need a separate dematerialization request form (DRF) for each company. Note each certificate number, distinctive number range if printed, and share quantity.
Check the company’s current name and registrar. If the company has merged or been renamed, find out who absorbed it and which registrar now handles its register. More on this below.
Make sure the shareholder has a Demat account in exactly the same name. The name on the Demat account must match the name on the certificate. If the certificate is in joint names, the account usually needs to match that holding pattern too.
Fill the DRF at your DP. It asks for your BOID, the company, the ISIN (the international securities code CDSC assigns to each listed security), certificate numbers and quantities. Get the ISIN right. A wrong code is a common reason for rejection.
Surrender the original certificates. You hand over the originals, not photocopies. Keep your own photocopies and ask the DP for a dated acknowledgment listing every certificate number you submitted.
Sign carefully. Your signature on the DRF is checked against the specimen the registrar holds from the original issue. If your signature has changed, raise it now rather than waiting for a rejection.
The DP forwards the request through CDSC to the registrar. The registrar verifies the certificates against its register and the signature against its specimen, then confirms or rejects.
Shares are credited to your BOID. Once confirmed, the shares appear in your Demat account and in Meroshare. Your DP can give you a statement showing the dematerialized holding.

How long this takes depends on the registrar and how clean your documents are. Some practitioners describe a few working days for a clean request, while older guidance from depository participants points to around two weeks. If your request involves a merged company or a name mismatch, expect longer. Follow up with the DP if nothing appears after two weeks.

On cost, dematerialization itself is cheap. The published DP fee schedule of Secured Securities Limited (broker number 36) lists dematerialization as free, alongside a one-time BO account opening fee of NPR 50, an annual maintenance charge of NPR 100 and an annual Meroshare fee of NPR 50. Fees can vary by DP, so ask before you file.

The four problems that actually stop people

The step-by-step list is the easy part. These are the situations that bounce requests.

1. The name does not match

The certificate says “Ram B. Shrestha.” The citizenship card says “Ram Bahadur Shrestha.” The Demat account follows the citizenship card. To a registrar, that can be two people.

Minor differences are sometimes accepted if the signature matches the specimen. Larger ones usually need a correction from the registrar first. Go to the registrar with the certificate, your citizenship certificate and any document that links the two versions of the name, and ask what it will accept. Do this before you file the DRF. A rejected request wastes weeks, and you will be asked for the same documents anyway.

2. The company no longer exists under that name

Nepal’s banking sector has been through years of mergers, and many of the paper certificates still in circulation were issued by banks and development banks that have since been absorbed. The certificate is not worthless. The acquiring company’s register carries your entitlement, converted at the merger’s swap ratio.

You can see this in practice. On August 7, 2026, Kumari Capital, acting as share registrar for Kumari Bank, published a 35-day notice listing lost certificates for which shareholders had applied for duplicates. Several of the certificates on that list were originally issued by Nepal Credit and Commerce Bank and Kasthamandap Development Bank, both now part of Kumari Bank’s register, according to the notice. NCCB’s own 2019 notice, reported by ShareSansar, had urged shareholders of four development banks it absorbed to dematerialize and claim their dividends through registrar Sunrise Capital.

So the first job with an old certificate is detective work. Find which company it became, and which registrar now handles that company. ShareSansar’s lists of merged companies and share registrars are a practical starting point, and the acquirer’s investor relations desk can confirm. Our explainer on what happens to your shares in a bank merger covers how swap ratios translate old holdings into new ones.

3. The certificate is lost or damaged

Lost certificates can be replaced, but it is slow by design. You apply to the registrar for a duplicate. The registrar publishes a public notice giving anyone with a competing claim 35 days to come forward, as the Kumari Capital notice and similar notices from other registrars show. If nobody objects, the registrar issues a duplicate certificate in the rightful holder’s name. Only then can you dematerialize it.

Budget well beyond the 35 days once you add preparation and the registrar’s own processing, and ask for its exact document checklist up front. Even without certificate numbers, a registrar can usually search its register by name, which matters for families who know a parent held shares but cannot find the paper.

4. The holder has died

This is a common case, and it combines every problem above. Shares in a deceased person’s name pass to legal heirs through transmission. For paper shares, that usually means going to the registrar with the death certificate, documents establishing the heirs, such as a relationship certificate, and the original certificates. The registrar records the transfer, and the heir then dematerializes the shares into their own Demat account.

If some of the deceased’s holdings are already in Demat form, the transfer to a legal heir runs through the DP and carries a fee. On Secured Securities Limited’s published schedule, that fee is 0.20 percent of the value, or NPR 500, whichever is higher, for holdings between NPR 1 lakh and NPR 5 lakh, falling to 0.10 percent or NPR 1,500, whichever is higher, above NPR 10 lakh. On a NPR 5 lakh holding, that works out to NPR 1,000. It is a small cost. The larger cost is the time it takes when heirs disagree or documents are missing, so settle who inherits what within the family first.

A worked example: what a forgotten certificate can be worth

The numbers below are hypothetical, to show the mechanism. They are not drawn from any real company.

Say your father bought 100 shares of a development bank at NPR 100 each in 2007, a total outlay of NPR 10,000. Over the following years, the bank issued bonus shares, and a few of those arrived as additional paper certificates before 2016. Later, the bank merged into a larger commercial bank at a swap ratio of 0.8 shares for every share held.

Suppose that, after bonuses, the family’s paper holding had grown to 160 shares of the old bank. After the merger, that becomes 128 shares of the acquirer. If the acquirer trades at NPR 250 a share, the holding is worth about NPR 32,000 on paper, more than three times the original outlay.

But the trunk version of this story leaks. Any bonus shares declared after the merger may be sitting uncredited because there was no BOID. Any cash dividends older than five years may already have gone to the investor protection fund. Any rights issue the acquirer ran is gone entirely. The NPR 32,000 is what you can still recover. What you have already lost depends on how long the paper sat untouched.

The tax question nobody asks until they sell

Dematerializing is not a taxable event. Selling afterward is. Capital gains tax on listed shares sold by individuals is now a final tax at 10 percent for holdings of one year or less and 7.5 percent for holdings over one year, under the Finance Bill, 2083 that Parliament approved for FY 2083/84 (2026/27), according to ShareSansar.

The trap with old certificates is cost basis. The system calculates your gain from the purchase cost it has on record. Shares you bought on the secondary market after 2016 carry that cost automatically. Shares that arrived through dematerialization often do not. If the cost field is blank or wrong, the system may assume a cost of zero or par value, which inflates your taxable gain.

The same gap can affect the holding period, which decides whether you pay 10 percent or 7.5 percent. Check with your DP how the acquisition date is recorded for your dematerialized shares before you sell anything large.

So before you place a sell order, open Meroshare, find the purchase details for the dematerialized holding and enter the correct cost. That means the original purchase price, adjusted for bonus and rights events. Keep the paper evidence: old allotment letters, bank records, the original certificate photocopies. Our guide to the weighted average cost of shares explains how bonus and rights shares move that figure, and our explainer on Nepal’s new capital gains tax for 2026/27 covers the rates.

A note for NRNs and family members abroad

Many certificates belong to families where the holder, or the heir, now lives abroad. The registrar wants the holder’s own signature, and the DP wants a Demat account in the holder’s name. Practice on representatives and remote KYC varies, so call the registrar before booking a flight home. Ask which documents must be originals, which need attestation, and whether a family member in Nepal can act for you.

The verdict

Dematerializing old physical share certificates in Nepal is a paperwork problem, not a market problem, and paperwork problems only get worse with time. The form takes ten minutes. The work is in matching names, tracing mergers, replacing lost paper and, too often, settling an inheritance. Each of those is easier this year than next.

Do not treat the trunk as a savings account. Every year a certificate stays on paper, dividends drift toward the investor protection fund, bonus and rights shares fail to reach you, and the records you need get older. Convert the shares, ask the registrar about any unclaimed dividends while you are there, fix the cost basis in Meroshare, and only then decide whether to hold or sell. That last decision deserves its own analysis. The other steps do not. They just need doing.

This is analysis, not financial advice.

Frequently Asked Questions (FAQs)

1. How can I dematerialize old physical share certificates in Nepal?

Open a Demat account, complete a Dematerialization Request Form (DRF), and submit your original share certificates to your depository participant (DP).