KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economy is showing mixed signals in the first quarter of fiscal year 2025/26, with the banking sector experiencing a notable 18.78 percent decline in profits due to excess liquidity and rising loan repayment challenges, even as foreign investment commitments surged to Rs 35.13 billion and mobile banking usage reached 27.7 million users—reflecting growing financial digitization.
The government and regulatory bodies are focusing on structural reforms, including decentralizing taxpayer services to local levels, restructuring Nepal Airlines into three entities, and tightening coordination to curb revenue leakage.
Meanwhile, operational challenges persist across key sectors, with SEBON remaining paralyzed for 45 days amid employee protests and several industries still disconnected from the power grid over unpaid dues, although Triveni Synthetic Yarn recently cleared its payments.
In positive developments, gold prices rose modestly, NRB announced Rs 2.71 billion in fixed-deposit investments, Rastriya Banijya Bank prepared a Rs 3 billion debenture issuance, and Mountain Energy declared a 21.05 percent dividend, signaling continued activity and confidence in parts of the financial and energy markets.
Profit of Nepal’s banking sector drops by 18.78 percent
The profitability of Nepal’s commercial banks has declined sharply in the first quarter of the current fiscal year 2025/26. According to financial statements published by 20 commercial banks, total profit fell by 18.78 percent to Rs 13.14 billion, compared to Rs 16.18 billion in the same period last year. Bank officials attribute the decline mainly to excess liquidity in the financial system and loan repayment challenges. Out of the 20 banks, 15 reported reduced profits during the review period.
Gold price rises by Rs 600 per tola in Nepal
Gold prices in the Nepali market increased by Rs 600 per tola on Friday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of hallmark gold reached Rs 238,400 per tola, up from Rs 237,800 per tola on Thursday. The price of silver also recorded a slight increase.
NRB to invest Rs 2.71 billion through fixed deposits
The Nepal Rastra Bank (NRB) has announced plans to invest Rs 2.71 billion through fixed deposits in various financial institutions. The central bank said the investment will be placed in Class A commercial banks, Class B national-level development banks, and Class C national-level finance companies, using funds drawn from different NRB reserves.
Foreign investment commitments rise sharply in first quarter
Foreign investment commitments in Nepal grew significantly during the first three months of the current fiscal year, according to the Department of Industry. From mid-August to mid-October, the government approved investments totaling Rs 35.13 billion across various sectors, and 311 new industries were registered. As of November 5, an additional 24 industries had also been registered.
Finance Minister urges coordinated effort to prevent revenue leakage
Finance Minister Rameshore Prasad Khanal has called for stronger coordination among government agencies to address weaknesses in revenue collection and prevent leakages. Speaking at a meeting of the Revenue Leakage Control Coordination Committee held at the Birgunj Customs Office on Friday, the minister emphasized inter-agency cooperation to curb smuggling and tax evasion, saying that authorities should focus on joint enforcement rather than only intercepting goods in transit.
Panel proposes restructuring Nepal Airlines into three entities
A high-level committee formed to recommend reforms in the civil aviation sector has proposed restructuring Nepal Airlines Corporation (NAC) into three separate entities. The panel, led by Industry, Commerce, and Supplies Minister Anil Kumar Sinha, submitted its report suggesting that NAC be converted into a public company under the Company Act, ensuring capital adequacy and share registration through state-owned institutions and funds.
Mobile banking users in Nepal reach 27.7 million
The number of mobile banking users in Nepal has reached approximately 27.7 million, according to recent data. Siddhartha Bank alone accounts for 1.159 million users, or about 4 percent of the total. During the review period, mobile banking transactions across all banks reached Rs 5,018 billion, with Siddhartha Bank handling Rs 342 billion—about 7 percent of the total. Despite its smaller user base, Siddhartha Bank’s high transaction volume reflects strong customer engagement and trust in its mobile banking services.
SEBON remains paralyzed for 45 days amid employee protest
The Securities Board of Nepal (SEBON) has been unable to function for 45 consecutive days as employees continue their protest against the Finance Ministry’s decision to reduce benefits. The strike began on September 23, and no official work has been conducted since. Employees, who initially allowed Chairperson Santosh Narayan Shrestha and other officials to enter the premises, have now blocked access and are demanding the chair’s resignation.
Eleven industries still without power over unpaid premium fees
Out of 25 industries that had their electricity supply cut by the Nepal Electricity Authority (NEA) for failing to pay dedicated/trunk line premium charges, 11 remain disconnected. The NEA had initially cut power to 23 industries on October 21 and 24, while two others had already shut down. After several firms cleared their dues during Tihar, power was restored to 12 industries, including Gharana Foods and Goyanka Foods.
Govt to decentralize taxpayer services to local levels
The federal government has decided to decentralize taxpayer services to local governments, making them the first contact point for taxpayer identification. With most tax services now digitized, the government plans to abolish all Taxpayer Service Offices nationwide by the next fiscal year and delegate their responsibilities to local administrations.
Rastriya Banijya Bank to issue Rs 3 billion debenture
The Rastriya Banijya Bank (RBB) will issue a 6% RBBL Debenture worth Rs 3 billion. The bank has appointed Kumari Capital Limited as the issue and sales manager for 3 million units, each with a face value of Rs 1,000. The agreement was signed on Thursday at the bank’s central office.
Fertilizer distributed to 386 cooperatives in Sudurpashchim
The Agricultural Inputs Company Limited (AICL) provincial office in Dhangadhi has distributed government-subsidized fertilizers through 386 agricultural cooperatives in coordination with local municipalities.
Between mid-September and mid-October, the office sold 952 metric tons of urea and 869 metric tons of DAP, while an additional 2,154 metric tons of DAP and 166 metric tons of urea are currently being distributed.
Triveni Synthetic Yarn clears dues, power supply restored
Triveni Synthetic Yarn Industries Pvt. Ltd., located in the Bara–Parsa Industrial Corridor, has settled its pending premium charges for electricity consumed through dedicated and trunk lines during the load-shedding period. Following the payment of its first installment, the Nepal Electricity Authority (NEA) restored the company’s power supply on Thursday evening. The connection had been disconnected on October 21, according to NEA officials.
Paddy procurement begins in Kailali
The Food Management and Trading Company Limited has begun purchasing paddy from designated production areas through 13 collection centers across Nepal. In Kailali district, paddy procurement is underway at six sub-centers—Bhajani, Mohanpur, Satti, Gauriganga, Joshipur, and Tikapur. According to regional head Deepak Thapa, a large number of farmers are bringing their produce to the centers. The target for Kailali is to purchase 35,000 quintals of paddy this season.
Mountain Energy announces 21.05 percent dividend for shareholders
Mountain Energy Nepal Limited has declared a 21.0526 percent dividend for its shareholders. At its board meeting on Thursday evening, the company decided to distribute a 1.0526 percent cash dividend (for tax purposes) and 20 percent bonus shares. The company has also proposed to hold its annual general meeting (AGM) on December 15.
Global IME Bank posts Rs 1.85 billion profit in first quarter
Global IME Bank reported a net profit of Rs 1.85 billion in the first quarter of the current fiscal year — a 22.92 percent increase compared to the same period last year. In the first quarter of FY 2024/25, the bank had earned Rs 1.51 billion. The growth is attributed to a rise in net interest and commission income and a reduction in loan-loss provisions. Based on unaudited results, Global IME emerged as the highest profit-earning bank in the first quarter.
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