KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic and governance developments reveal a landscape marked by financial tightening, administrative restructuring, and mixed sectoral performance: the NEPSE index dipped amid broad-based declines even as gold and silver prices rose, while the Nepal Rastra Bank moved to withdraw excess liquidity and address growing risks from Rs 188 billion in dormant accounts and a major restructuring of Karnali Development Bank following large-scale fraud.
Revenue pressures were evident, with petroleum imports dominating customs income but targets still unmet, prompting measures such as decentralizing Inland Revenue services and ending the DTAA with Mauritius to strengthen tax compliance. At the same time, operational disruptions—such as KUKL’s temporary service halt and customs agents’ brief strike—highlight ongoing institutional challenges.
In the real economy, agricultural updates showed modest gains in paddy production and improved food security reflected in Nepal’s better Global Hunger Index score, though stunting persists; meanwhile, farmers expressed dissatisfaction with sugarcane pricing, Mustang orchardists began early management, and Chitwan poultry faced a high prevalence of anemia virus.
Social protection and market access saw incremental improvements through expanded social security enrollment and subsidized food distribution in Manang. Overall, the indicators point to a system attempting stabilization and reform amid structural constraints, public health concerns, and persistent gaps in administrative efficiency.
NEPSE slips by 7.86 points
The Nepal Stock Exchange (NEPSE) index fell by 7.86 points on Wednesday, closing at 2,606. Daily trading volume also dipped slightly to Rs 3.73 billion, down from Rs 3.75 billion the previous day. Share prices increased for 79 companies while 169 recorded losses. All sectoral sub-indices declined, though each by less than one percent. Swastik Laghubitta, Muktinath Krishi Company, and SY Panel—whose trading debuted today—posted a 10 percent gain. Jhapa Energy saw the sharpest drop, sliding 9.30 percent.
Gold price rises by Rs 200 per tola; silver up Rs 150
Gold prices increased by Rs 200 per tola in the domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, hallmark gold now costs Rs 252,100 per tola, up from Rs 251,900 the previous day. Silver prices also surged, rising by Rs 150 per tola to reach Rs 3,750, compared to Tuesday’s Rs 3,600.
NRB to withdraw Rs 40 billion from market liquidity
The Nepal Rastra Bank (NRB) is set to absorb Rs 40 billion from the financial system for an 18-day period by issuing deposit collection instruments today. The move aims to curb excess liquidity and stabilize interest rates. Total deposits across the banking system now exceed Rs 7.5 trillion. Only Class ‘A,’ ‘B,’ and ‘C’ institutions licensed by NRB can participate in the interest-rate bidding process. The principal and interest will be paid on December 28.
Inactive bank accounts rise to Rs 188 billion
Inactive accounts across 54 banks and financial institutions now hold Rs 188.35 billion, a figure that continues to rise. As per NRB rules, savings accounts without transactions for three years and current/call accounts inactive for one year must be classified as dormant. Pressure on staff to meet account-opening targets has contributed to the surge. With about 60 million such accounts—more than double Nepal’s population—NRB is preparing a plan to mitigate risks related to dormant accounts.
Customs agents resume operations after government assurances
Customs agents nationwide have restarted services after halting work over dissatisfaction with newly enforced Customs Act provisions. According to Customs Department spokesperson Kishor Bartaula, all customs points are now fully operational. The department acknowledged concerns raised by the Customs Agents’ Federation, particularly around penalties, and pledged phased improvements. Issues requiring regulatory changes will be forwarded to the Ministry of Finance for incorporation into upcoming regulations.
Nepal improves to 14.8 on global hunger index
Nepal has made notable progress in food security, moving from the “serious hunger” category to “moderate hunger” on the Global Hunger Index (GHI). The 2025 GHI report by Welt Hunger Hilfe and Li-Bird shows Nepal’s score improving to 14.8 from 37.1 in 2000. The report credits government reforms and remittance inflows. However, child undernutrition remains a major challenge, with stunting affecting 26 percent of children under five. Finance Minister Rameshwar Prasad Khanal emphasized the need for sustained efforts and public–private cooperation to reach the zero-hunger target by 2030.
Revenue Department decentralizes major services to 39 local governments
The government is shifting several Inland Revenue Department (IRD) services to 39 local units in the first phase to improve accessibility and transparency. These services include issuing PAN for individuals and businesses, providing excise licenses, and collecting federal revenue. This follows the dissolution of 36 tax service offices. The IRD aims to expand the shift to all local units next fiscal year. Training for local officials begins today, with service delivery expected to start by the end of December.
Petroleum imports make up 54.36% of Kakarbhitta customs revenue
Petroleum products were the largest source of customs revenue at the Mechi Customs Office, Kakarbhitta, contributing 54.36 percent of total revenue from the top ten imported goods. From July 17 to November 16 of the current fiscal year, the office collected Rs 2.968 billion in revenue from fuel imports, which totaled Rs 6.276 billion in value. Although fuel imports were up 2.1 percent compared to last year, the customs office still fell short of its target of Rs 18.877 billion during the review period.
SSF and CNI agree to expand contribution-based social security
The Social Security Fund (SSF) and the Confederation of Nepalese Industries (CNI) signed an MoU on Tuesday to enroll all CNI-affiliated businesses into the contribution-based social security program. The agreement, signed by SSF Executive Director Kaviraj Adhikari and CNI Director General Dr. Ghanshyam Ojha, aims to expand coverage among employers and workers. SSF Chair Krishna Hari Pushkar said the partnership marks an important step toward strengthening the social security system. The Fund will conduct regular awareness and training programs jointly with the CNI.
FYMC distributes over 1,200 quintals of subsidized food in Manang
The Food Management and Trading Company (FTMC) in Manang has expanded its subsidized food distribution program this fiscal year, selling more than 1,200 quintals of essential goods and benefiting over 1,000 residents. The district’s subsidy quota jumped from 200 to 1,080 quintals this year. Despite tough geographic conditions, FTMC continues supplying rice, pulses, oil, and sugar, transporting goods by mule to areas inaccessible by road.
Govt raises sugarcane support price; farmers express dissatisfaction
The government has increased the minimum support price for sugarcane to Rs 620 per quintal for fiscal year 2025/26—an increment of Rs 35—along with an additional subsidy of Rs 70 per quintal. The price was calculated based on production cost, transportation, and profit margins. Farmers, however, criticized the decision, saying it was made without the required consultation with mill owners. Sugar mills, including Indushankar Sugar Industry, plan to begin crushing next week.
Mustang farmers begin apple orchard care earlier this year
Farmers in Gharpajhong, Thasang, and Baragung Muktikshetra of Mustang have begun apple orchard management earlier than usual to boost yield and quality. Farmer Diwas Thapa said early leaf fall after harvest prompted the early start. Orchard care includes pruning to ensure balanced sunlight and ventilation, applying fertilizers, irrigating, and spraying Bordeaux mixtures to prevent pests and diseases. According to District Agriculture Office chief Rajesh Gurung, upper Mustang will begin orchard management between December 30 and mid-February.
KUKL to suspend services for three days
Kathmandu Upatyaka Khanepani Limited (KUKL) will suspend all services, including bill payments, for three days starting December 12 at 3 p.m. until December 14. Chief Executive Director Ashok Kumar Paudel said the closure is necessary for merging software systems of the Chhetrapati and Tripureshwar branches and integrating systems of the Maharajgunj and Kamaladi branches. During this time, online payments, revenue counters, and new water-connection services at the affected branches will be unavailable.
Over half of Chitwan’s poultry samples test positive for anemia virus
The Chicken Anemia Virus (CAV) has been detected in 54 percent of poultry samples collected from Chitwan and neighboring districts. From mid-July to mid-November, the National Avian Disease Research Laboratory tested 182 samples, of which 98 tested positive. Laboratory Chief Dr. Bijay Kumar Shrestha said the virus weakens chickens’ immune systems, leading to anemia, stunted growth, and reduced productivity, ultimately harming farmers financially. He advised poultry farmers in Chitwan, Makwanpur, and Nawalparasi to vaccinate their birds and adopt strict biosafety protocols, including thorough disinfection of visitors and vehicles entering farms.
Baglung records 84.4-metric-ton rise in paddy harvest
Paddy production in Baglung district has increased this year due to timely rainfall, the Agriculture Knowledge Centre reported. Information officer Pratibha Sharma said production rose by 84.4 metric tons, reaching 20,784.4 metric tons compared to last year’s 20,000 metric tons. The modest rise is linked to reduced damage from root rot disease, which had affected crops last season. Farmers cultivate multiple varieties—including Khulum 4, Jetho Budho, and Marsie—but only 6,148 hectares out of the district’s 46,148 hectares of arable land have irrigation. Despite the increase, Baglung remains unable to meet its own rice demand.
NRB restructures Karnali Development Bank after Rs 3.2 billion fraud
The Nepal Rastra Bank has begun restructuring Karnali Development Bank, which collapsed after failing to return depositors’ funds amid massive fraud. The unprecedented restructuring plan reduces the shareholdings of individuals implicated in the scandal to just one percent and converts depositors’ savings into equity, effectively making depositors the bank’s new owners. According to management team coordinator Tika Ram Khatiwada, shares held by 18 people and two firms accused of embezzlement have been cut to one percent, leaving 99 percent of shares available for depositors. The central bank is now seeking their approval and will then look for new investors to revive the institution under a new name and leadership. On July 30, the Central Investigation Bureau filed a case against 109 individuals for allegedly misappropriating Rs 3.2 billion.
Citizen Life Insurance proposes 20 percent cash dividend
Citizen Life Insurance has proposed distributing a 20 percent cash dividend to its shareholders, as decided in a recent Board of Directors meeting. The proposal requires approval from the Insurance Authority and the company’s General Assembly. Since the company has already met the mandated paid-up capital requirement of Rs 5 billion, this year’s proposal focuses solely on cash payments—unlike last year when the company offered a 26.98 percent bonus share and a total dividend of 28.40 percent.
Government terminates double taxation agreement with Mauritius
The government has decided to end the Double Taxation Avoidance Agreement (DTAA) with Mauritius, following a Cabinet decision on Monday. The agreement, in effect since August 3, 1999, has been formally revoked under Article 29, Sub-clause 1 of its termination provisions. The Inland Revenue Department said the move aligns Nepal’s tax framework with domestic legal changes and evolving global tax standards that require greater transparency and safeguards against misuse. The termination will take effect for Nepal on July 17 of the next fiscal year, 2026/27.
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