KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape reflects mixed signals, with the NEPSE index experiencing a slight decline and third-quarter bank reports highlighting weak profitability, rising NPLs, and reduced credit growth.
While most C-class finance companies returned to profit, broader trade challenges persist, including a daily trade deficit of NPR 4.15 billion despite export improvements.
The National Planning Commission recommended budget cuts for underperforming projects amid fiscal constraints, and legal actions were launched against 122 tax defaulters.
On a positive note, mobile wallet usage surged past NPR 300 billion, Bhairahawa’s tax revenue rose, and several IPOs were announced, including by Trade Tower and Hotel Sarathi.
Meanwhile, Indian investment is backing a solar project in Banke, and gold prices hit a record high of NPR 191,000 per tola. The Supreme Court deferred a hearing on NRB governor appointment rules, and two major banks—Kumari and Himalayan—fell short of capital adequacy requirements.
NEPSE index slightly drops
The NEPSE index recorded a minor drop of 7.75 points, ending the day at 2,698.28. As per NEPSE data, a total of 21.12 million units across 3,766 shares from 319 listed companies were traded 78,678 times, amounting to a turnover of Rs 8.77 billion 5,720,293.
Sector-wise, development banks rose by 0.43%, hotels and tourism by 0.06%, hydropower by 0.77%, investment by 0.17%, production and processing by 0.03%, and mutual funds by 0.44%. All other sectors witnessed declines: banking fell by 0.85%, finance by 1.03%, life insurance by 0.16%, microfinance by 0.11%, non-life insurance by 0.15%, and trading by 1.52%.
Gold reaches record high in Nepali market
Gold prices in Nepal have soared to a new peak, trading at NPR 191,000 per tola on Monday—up NPR 1,200 from the previous day. This surpasses the earlier record of NPR 190,600 per tola set last Thursday. Meanwhile, silver prices also remained unchanged at NPR 1,960 per tola.
Majority of finance companies return to profit in Q3
All 15 C-class financial institutions currently operating in Nepal have released their Q3 results. While five remain in the loss column, ten have bounced back to profitability by the end of Chaitra. This is a strong recovery compared to last year when eight companies were reporting losses.
Combined, the sector posted a net profit of Rs 175.8 million this year—a sharp improvement from the Rs 370 million loss during the same period last year. Several firms that were previously in the red, such as Progressive, Pokhara, and Goodwill Finance, have turned profitable.
NPC recommends cuts to struggling projects due to budget constraints
The National Planning Commission (NPC) has proposed scaling back funding for underperforming or troubled projects in light of a likely financial crunch in the upcoming fiscal year 2082/83. The suggestion was made in a report submitted to the Ministry of Finance on Sunday as part of budget discussions.
The report points out that significant growth in revenue is unlikely, with foreign grants decreasing and foreign loans falling short of expectations. As a result, the Commission stressed the need for careful financial management, warning that even essential sectors may face funding shortages.
Indian Power Minister to visit Nepal for Arun-3 inspection
India’s Minister for Power and Urban Affairs, Manohar Lal Khattar, is scheduled to visit Nepal on Tuesday to review progress on the Arun-3 hydropower project. The project is being developed by SJVN Arun-3 Power Development Company (SAPDC), a subsidiary of India’s Satluj Jal Vidyut Nigam (SJVN). He is expected to return on Wednesday.
Nepal’s Minister for Energy, Water Resources, and Irrigation, Deepak Khadka, will accompany the visit, along with SJVN’s Chairperson Rajkumar Chaudhary and CEO Prashant Sharma.
Banks’ Q3 results mirror economic slowdown
The third-quarter financial disclosures from banks and financial institutions reflect the ongoing economic stagnation. Analysts note reduced profitability, minimal loan growth, higher non-performing loans (NPLs), lower net interest income, and a decline in return on equity (ROE). Reports from 20 commercial banks show that the average NPL has reached 4.83%.
This figure marks an increase compared to the second quarter of the current fiscal year (4.49%) and the same quarter of the previous year (3.65%).
Mobile wallet usage in Nepal surpasses NPR 300 billion
Mobile wallet transactions in Nepal have crossed NPR 300 billion, reaching NPR 326.19 billion in the first eight months (Shrawan to Falgun) of the current fiscal year, according to Nepal Rastra Bank data.
This surpasses the entire transaction volume of the previous fiscal year 2080/81, which was NPR 302 billion. In comparison, total wallet transactions were NPR 219 billion in 2079/80 and just NPR 76 billion five years ago, reflecting the rapid adoption of digital payments in the country.
Daily trade deficit hits NPR 4.15 billion despite export gains
Nepal’s daily trade deficit has widened to NPR 4.15 billion, even as exports show some improvement. Economists point to increasing imports of goods that could be locally produced as a major reason. According to the Department of Customs, Nepal’s trade deficit reached NPR 1.121 trillion over the first nine months of the fiscal year.
This reflects a 6.45% rise compared to the same period last year, when the deficit was NPR 1.053 trillion, or about NPR 3.9 billion per day.
Nepal Infrastructure Bank sees 8% drop in profit
Nepal Infrastructure Bank (NIFRA) posted a net profit of NPR 900 million for Q3 of FY 2081/82, down 8.16% from last year’s NPR 980 million. The bank also saw a 24% fall in net interest income. Its non-performing loan ratio stands at 0.21%, while earnings per share are NPR 5.56. Net worth per share is NPR 117.81, and the P/E ratio is 49.
Govt urges 28 firms to import wheat from India within 15 days
The Department of Commerce, Supplies, and Consumer Protection has urged 28 companies with approved wheat import quotas from India to finalize procurement within 15 days. Of 41 shortlisted firms, 31 applied and 28 met the requirements for import authorization.
Each approved company is allowed to import up to 3,000 metric tons of wheat. The directive comes as part of the department’s effort to ensure timely wheat supply.
Supreme Court postpones hearing on Governor appointment rule
The Supreme Court once again postponed a hearing on a writ petition that seeks to block the implementation of revised criteria for appointing the Nepal Rastra Bank governor. The case, scheduled to be heard by Justices Mahesh Sharma Poudel and Nripadhwaj Niraula, was deferred due to “time constraints.”
The government had altered the criteria, removing the previous age cap of 65 for candidates. In response, advocate Bishal Thapa and others challenged the amendment in court. Earlier, Justice Nityananda Pandey had issued a temporary order suspending the enforcement of the new criteria until further notice.
122 tax defaulters face legal action in Hetauda
The Inland Revenue Office in Hetauda has initiated legal proceedings against 122 taxpayers who failed to pay their taxes despite repeated notices. Measures include freezing their bank accounts, seizing assets, and suspending business transactions. These defaulters owe a combined total of over Rs 600 million. The legal push has already led some to begin settling their dues, according to tax officials.
Indian investment to power solar project in Banke’s Narainapur
Indian investors have committed to a solar energy initiative in Banke’s Narainapur Rural Municipality, one of the district’s least electrified regions. A 10-megawatt solar project is planned following meetings with local officials and energy experts.
The project is backed by discussions involving Narainapur Chairperson Istiyak Ahmad Shah, ex-minister Krishna KC, and other local leaders.
Former Nepal Bank Chair fined, removed amid bribery investigation
Nepal Rastra Bank has penalized and removed Dr. Chandra Bahadur Adhikari, former Chairperson of Nepal Bank, amid an ongoing bribery investigation led by the CIAA. Adhikari has been fined Rs 500,000 and dismissed from the board of directors for violating the Bank and Financial Institutions Act.
Although previously removed as chair, he had continued as an independent director until this decision, which now ends his tenure completely.
Trade Tower launches IPO for Nepali migrant workers
Trade Tower Limited has opened its Initial Public Offering (IPO) exclusively for Nepalis employed overseas. Of its total capital of NPR 815.6 million, the company is offering shares worth NPR 397.16 million.
In the first phase, approximately NPR 39.7 million worth of shares (around 397,169 units) are being issued to individuals with labor permits for foreign employment.
Bhairahawa Tax Office collects NPR 8.47 billion in 9 months
The Bhairahawa Inland Revenue Office has collected NPR 8.47 billion in taxes during the first nine months of the fiscal year—a rise of NPR 1.32 billion (18.3%) from the same period last year.
The growth is attributed to stronger economic indicators, improved tax audits, proactive enforcement, and enhanced taxpayer education.
Hotel Sarathi to float IPO worth NPR 150 million
Hotel Sarathi Pvt. Ltd. is gearing up to launch its IPO worth NPR 150 million, representing 30% of its issued capital. The company has partnered with Citizens Capital as the issue manager.
After the IPO, Sarathi’s paid-up capital will rise to NPR 500 million. The firm aims to get listed within FY 2082/83, targeting investors in the tourism sector.
DDC opens first franchise outlet in Madhesh Province
The Dairy Development Corporation (DDC) has inaugurated its first partnership-based outlet in Madhesh Province. Located in Lalbandi Municipality-7, Sarlahi, the outlet was launched in collaboration with Laxmi Enterprises.
DDC has provided the distributor with two refrigerators to support smooth operations. The new outlet aims to improve access to quality dairy products in the region.
Kumari and Himalayan banks fall short of core capital requirement
Kumari Bank and Himalayan Bank have failed to meet the Nepal Rastra Bank’s mandated 8.5% Tier-1 capital requirement. As per recent financial reports, Kumari Bank’s core capital is at 7.31% and Himalayan Bank’s at 8%.
Due to this shortfall, both institutions are currently barred from issuing new loans. Several other banks also hover just above the threshold, indicating tight liquidity across the sector.
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