KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
The recent increase in insurance policy renewals indicates a positive trend in Nepal’s economic recovery, as demonstrated by the Nepal Insurance Authority’s report showing a notable rise in both first-year premiums and renewal collections for the current fiscal year.
By mid-December 2024, life insurance companies had garnered Rs 52.81 billion from policy renewals, a 4% growth compared to the previous fiscal year.
This uptick reflects growing consumer confidence and financial stability, suggesting that individuals are prioritizing long-term security in the face of economic challenges.
The increased renewal rates also highlight the resilience of Nepal’s insurance sector, positioning it as a key pillar of the country’s financial landscape.
Increase in insurance policy renewals
The renewal of insurance policies has been on the rise recently, signaling a steady recovery in economic activity.
As reported by the Nepal Insurance Authority (NIA), 14 life insurance companies—excluding microinsurance providers—had gathered Rs 12.47 billion in first-year premiums and Rs 52.81 billion from policy renewals by mid-December 2024 in the current fiscal year.
In comparison, these companies had collected Rs 10.97 billion from initial premiums and Rs 50.77 billion from renewals during the same period last fiscal year (FY 2023/24).
Gold and silver prices dip slightly
The prices of gold and silver saw a slight drop in Nepal on Wednesday, as reported by the Federation of Nepal Gold and Silver Dealers Association.
Gold decreased by Rs 100 per tola, bringing the price to Rs 149,700 per tola, down from the previous day’s rate of Rs 149,800 per tola.
Similarly, silver dropped by Rs 5 per tola, with the new price at Rs 1,800 per tola, compared to Rs 1,805 per tola the day before.
Karnali Development Bank declared troubled
Karnali Development Bank has been declared a troubled institution by Nepal Rastra Bank (NRB).
In a meeting held on Wednesday, the NRB board decided to declare the bank problematic under Section 86(b) of the Nepal Rastra Bank Act, 2058.
Following the declaration, NRB has taken control of the bank’s management.
A three-member management team has been formed, led by NRB Deputy Director Tikaram Khatri. This team will assume its responsibilities starting Thursday.
The team will focus on returning depositors’ savings, recovering loans, and investigating financial irregularities to initiate legal action, NRB stated.
Record high in Nepalis leaving for foreign employment
Despite the government’s assertions of a better investment climate and job growth, the number of Nepali citizens seeking employment abroad has reached a record level.
Data from the Department of Foreign Employment reveals that nearly 84,000 Nepalis left the country for work in just one month, setting a new all-time high in the history of Nepal’s labor migration.
Loknath Bhusal, director of the department, confirmed that the number of individuals leaving for foreign employment in Mangsir (mid-November to mid-December) was unprecedented.
The previous highest number recorded was 76,403 in Bhadra (mid-August to mid-September) of the last fiscal year.
In total, 83,933 Nepalis traveled to 96 countries with government-issued work permits last month, including 70,500 men and 13,433 women, through both individual and institutional channels.
This year’s figure is 12,000 higher than the 71,276 workers who went abroad during the same period last year.
Govt introduces ordinance to regulate cooperatives
A new ordinance aimed at regulating cooperatives and ensuring the return of funds lost by depositors is set to reach the President’s office at Shital Niwas on Thursday.
The decision follows a Cabinet meeting on Tuesday evening, which approved amendments to the Cooperative Act of 2017, the Nepal Rastra Bank Act of 2002, and the Deposit and Credit Protection Fund Act of 2016.
Communications and Information Technology Minister Prithvi Subba Gurung confirmed on Wednesday that the Cabinet had decided to issue the ordinance.
(Prepared by Srija Khanal)
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