KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s latest economic signals point to cautious optimism tempered by structural and policy challenges: the share market posted modest gains amid selective sectoral strength, while falling bank deposit rates below 5% reflect excess liquidity and weak credit demand despite a sharp rise in deposits. Record-high gold prices, driven by global factors and a stronger dollar, indicate heightened risk aversion among investors.
Regulatory moves by Nepal Rastra Bank—tightening collateral seizure norms, easing provisioning requirements, simplifying branch mergers, allowing blacklist removal after full recovery, and capping founder shareholding—suggest a balancing act between financial stability, operational efficiency, and governance reform.
At the same time, the widening trade imbalance in iron and steel, slowdown in loan growth, and losses from the Tatopani border disruption highlight ongoing vulnerabilities in industry, credit transmission, and cross-border logistics, while developments such as rising agricultural exports, corporate dividend announcements, and the CIAA’s appeal in the Melamchi case underscore the continued interplay between economic performance, corporate activity, and institutional accountability.
Share market rises by 6.74 points; turnover reaches Rs 3.44 billion
The Nepal Stock Exchange (NEPSE) index inched up by 6.74 points on Monday, closing at 2,601.61. Trading activity saw 7,757,625 shares of 329 listed companies exchanged through 56,122 transactions, generating a total turnover of Rs 3.44 billion. Sectoral indices for banking, development banking, finance, life insurance, and manufacturing posted gains. Swastik Laghubitta and SY Panel Nepal touched the upper circuit, while Himstar Urja Company recorded the steepest decline, with its share price dropping by 6.95%.
Gold price hits record Rs 260,700 per tola
Gold prices reached a new all-time high on Monday, climbing to Rs 260,700 per tola (11.66 grams), up by Rs 1,900 from Sunday after a Rs 2,200 rise the previous day. According to the Federation of Nepal Gold and Silver Dealers’ Association, the surge reflects higher international prices and a stronger US dollar. Silver prices also increased by Rs 45, settling at Rs 3,870 per tola.
Bank deposit interest rates fall below 5% after cuts by 13 banks
The maximum average interest rate on individual fixed deposits at commercial banks has dropped below 5% for the period from December 16 to January 14, 2026. Following rate reductions by 13 banks, the average maximum rate now stands at 4.834%, down 0.2065 percentage points from mid-November’s 5.0405%. Prime Commercial Bank, Global IME Bank, and Rastriya Banijya Bank implemented the largest cuts of 0.5 percentage points each. Only Global IME Bank and Himalayan Bank are offering a maximum rate of 5.5%. Institutional fixed deposit rates also declined by 0.13 percentage points.
NRB tightens collateral seizure rules, reduces provisioning pressure on banks
Nepal Rastra Bank (NRB) has revised its collateral acquisition rules, now requiring banks and financial institutions to conduct at least three unsuccessful public auctions before taking over non-banking assets. Previously, assets could be acquired after two failed auctions. The central bank has also removed the provision mandating 100% provisioning from the date of asset acquisition, easing the regulatory burden on lenders. Under the new rules, collateral must be valued at either the prevailing market price or the outstanding loan amount, whichever is lower. These measures are intended to strengthen asset recovery while providing operational relief to banks.
NRB simplifies branch mergers, requires 90-day public notice
Nepal Rastra Bank has eased procedures for banks and financial institutions to merge or integrate branches in metropolitan areas, allowing such mergers without prior approval where electronic transactions are high. However, institutions must issue a 90-day public notice through a national daily, their websites, and the concerned branches. Customers affected by branch mergers may repay loans or close accounts without any service charges. The directive seeks to balance operational flexibility for BFIs with transparency and consumer protection.
Iron and steel imports rise to Rs 52.95 billion, while exports plunge 72.74%
Despite sluggish activity in the industrial and construction sectors, imports of raw iron and steel materials increased by 5.87% in the first four months of the current fiscal year, reaching nearly Rs 52.95 billion. In contrast, exports of iron and steel products dropped sharply by 72.74% to Rs 1.24 billion, down from Rs 4.57 billion a year earlier. The increase in raw material imports alongside declining exports suggests higher domestic consumption, contradicting industry claims of a construction slowdown. The export decline is largely blamed on policy uncertainty and the cancellation of the 8% export subsidy.
CIAA challenges Melamchi verdict at Supreme Court, seeks full Rs 6.80 billion penalty
The Commission for the Investigation of Abuse of Authority (CIAA) has appealed the Special Court’s verdict in the Melamchi Water Supply Project corruption case to the Supreme Court. The CIAA argues that the court overlooked evidence and legal precedents when acquitting three former secretaries and partially convicting seven others. It is demanding that the full penalty, including the claimed Rs 6.80 billion as the standard amount, be imposed on all accused named in the charge sheet. Earlier, former secretary Gajendra Kumar Thakur was sentenced to more than eight years in prison along with a fine and recovery exceeding Rs 101 million.
Tatopani border reopens after week-long blockade; goods worth Rs 300 million damaged
The Tatopani border point along the Araniko Highway in Sindhupalchok reopened on Sunday after a week-long obstruction by locals was resolved. The blockade stemmed from disputes over the non-implementation of an agreement related to Eco landslip construction. During the closure, around 300 containers—mainly carrying fruits such as apples, kiwis, and grapes—were stranded. Traders estimate that about 40% of the fruit, worth roughly Rs 300 million, was spoiled. Although customs clearance has resumed, processing remains slow.
Loan growth slows despite Rs 250 billion rise in deposits
Over the past five months, banks mobilized close to Rs 250 billion in deposits but extended only Rs 75 billion in loans, highlighting a sharp slowdown in credit growth compared to last year. Even with excess liquidity, margin lending for share investments rose by 3%, adding Rs 4.287 billion by October 17, though this was still lower than the previous year. Residential real estate loans increased by 5.3%. Analysts note that the limited impact on the stock market suggests these funds are not primarily being invested in equities.
NRB permits blacklist removal after full loan recovery
NRB has introduced a provision allowing borrowers to be removed from the blacklist once a licensing institution fully recovers outstanding dues by accepting non-banking assets as collateral. The institution must also obtain a written commitment from the borrower relinquishing any future claim on the accepted asset. Additionally, the directive provides for the immediate removal of individuals, firms, or companies mistakenly blacklisted, following a decision and request from the institution’s chief executive.
Jumla apple exports earn Rs 412.9 million
Jumla exported 5,591 metric tons of apples this year, generating Rs 412.9 million in revenue, according to the District Agriculture Development Office. Out of total production of 18,245 metric tons, only 30% was exported. Although the cultivated area expanded from 4,377 to 4,497 hectares, overall production declined due to hailstorms and unseasonal rainfall. Processing into juice, jam, and other products consumed 2,648 metric tons, while 1,765 metric tons remain in storage. The average farm-gate price stood at Rs 65.50 per kg.
United Idi Mardi proposes 5% bonus shares and 0.26% cash dividend
United Idi Mardi and RB Hydro Power Limited has announced a dividend proposal from its fiscal year 2024/25 profits. At a board meeting held on December 12, the company proposed distributing 5% bonus shares along with a 0.26% cash dividend for tax purposes. This marks an increase from last year’s payout of 4% bonus shares and a 0.211% cash dividend. On Monday, the company’s shares were trading at Rs 557. The dividend will be distributed after approval at the forthcoming general meeting.
NRB limits founder shareholding to 15%, sets five-year compliance deadline
Nepal Rastra Bank has instructed founder shareholders of banks and financial institutions to bring their equity holdings within regulatory limits by fiscal year 2030/31. Individual ownership is capped at 15% in one BFI and 1% in others, with higher limits of 25% and 10% for ‘D’ class institutions. Shareholders failing to comply will face blocked dividends, restrictions on rights issues, and possible forced mergers or acquisitions. The NRB has also withdrawn the earlier provision allowing government funds such as EPF and CIT to hold up to 25% equity, granting them five years to reduce excess holdings.
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