KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
The collected reports present a mixed but revealing picture of Nepal’s economy and governance, showing resilience in the financial sector alongside serious infrastructure and implementation challenges. Nepal Rastra Bank’s absorption of Rs 20 billion to manage excess liquidity, combined with a 39.78 percent surge in commercial bank profits, indicates strong banking-sector performance and ample liquidity in the financial system.
However, the simultaneous decline in the NEPSE index and falling gold and silver prices suggest that investor sentiment remains cautious despite improved financial indicators.
On the development front, the government is emphasizing regional connectivity, tourism reform, cotton cultivation, and housing support for disaster-affected families, reflecting a broader strategy focused on infrastructure, employment, and domestic production. Yet implementation gaps remain striking. The 26-day closure of the Tatopani border has disrupted trade worth over Rs 20 billion, while the Rs 220 million Butwal abattoir remains unused due to local disputes.
Revenue from mineral extraction has fallen by 44 percent, and Mechinagar’s nearly Rs 963 million in unresolved financial irregularities highlights persistent weaknesses in public financial management. Overall, the reports suggest that while policy direction is increasingly growth-oriented, execution capacity and institutional accountability continue to be Nepal’s most significant constraints.
NEPSE falls 7.37 points on final trading day of the week
The Nepal Stock Exchange (NEPSE) declined by 7.37 points on Friday, the final trading day of the week, closing at 2,643.83 points. The benchmark index fell by 0.27 percent compared to the previous session. Despite the decline, market turnover increased, with transactions worth Rs 4.275 billion. A total of 9.75 million shares of 344 companies were traded through 34,060 transactions. The Sensitive Index, however, edged up by 0.13 points to close at 464.73.
Gold falls to Rs 301,600 per tola, silver also declines
Gold and silver prices declined in the domestic market on Friday, according to the Federation of Nepal Gold and Silver Dealers’ Association. The price of gold dropped by Rs 4,600 per tola to Rs 301,600. On Thursday, it had traded at Rs 306,200 per tola. Silver also became cheaper, falling by Rs 90 per tola to Rs 4,660, compared with Rs 4,750 on the previous trading day.
NRB absorbs Rs 20 billion through one-month deposit collection instrument
Nepal Rastra Bank (NRB) absorbed Rs 20 billion from the domestic financial system on Friday through a one-month deposit collection instrument aimed at managing excess liquidity in the market. The operation was conducted through an online bidding system managed by the Monetary Management Department. Eligible Class A, B, and C financial institutions submitted competitive interest-rate bids before the specified deadline. The principal and interest are scheduled to be settled on September 18. Under the allocation mechanism, bids carrying the lowest interest rates are given priority, while bids quoting the same rate are allotted deposits proportionately. The central bank also clarified that deposits collected through this instrument will not be counted toward the statutory liquidity ratio and cannot be used to fulfill mandatory cash reserve ratio requirements.
Disaster-hit families to receive concessional housing loans
Families affected by natural disasters will be eligible for concessional loans to construct private housing under a newly amended government policy. The first amendment to the Procedure for Interest Subsidy on Concessional Loans, 2025 was introduced by the Ministry of Finance under the Financial Procedures and Fiscal Responsibility Act, 2019. Nepal Rastra Bank has directed financial institutions to implement the revised framework immediately. Applicants must submit a self-declaration confirming that they have not received duplicate grants from the National Disaster Risk Reduction and Management Authority. The revised policy allows interest subsidies to continue upon loan renewal, permits retroactive claims for delayed installments under certain conditions, and retains the original terms for loans issued under the previous framework.
14 commercial banks publish financial results showing higher profits
Fourteen commercial banks operating in Nepal have published their unaudited financial statements for fiscal year 2025/26, showing a significant rise in overall profitability. The combined net profit of the reporting banks increased by 39.78 percent, rising from Rs 38.27 billion in the previous fiscal year to Rs 53.12 billion. Thirteen banks posted profit growth, while one institution reported a net loss. Nabil Bank recorded the highest net profit at Rs 7.91 billion, while Himalayan Bank posted the highest percentage growth, with profit surging by more than 1,041 percent to Rs 1.48 billion. Kumari Bank and Global IME Bank also reported strong financial performances.
Health Insurance Board disburses over Rs 3 billion to healthcare institutions
The Health Insurance Board has disbursed Rs 3.56 billion to 376 health institutions across the country under the national health insurance programme. The payments cover claims made during mid-January and February 2025. Beneficiary institutions include government hospitals, primary healthcare centers, municipal hospitals, eye hospitals, teaching hospitals, and private health facilities. The board said the funds were released after verification and evaluation of claims submitted by participating institutions, with the aim of ensuring the continued delivery of subsidized healthcare services to insured citizens.
Finance Ministry updates salary scales for judiciary and constitutional bodies
The Ministry of Finance has revised the salary structure for officials serving in the judiciary and constitutional bodies. The new scale was published in the Nepal Gazette on July 22 and has been made effective retroactively from July 17. Under the revised structure, the Chief Justice will receive a monthly salary of Rs 112,522, while Supreme Court justices, Judicial Council members, and the Attorney General will receive Rs 93,547 per month. The notice also provides for housing allowances, utility subsidies, and vehicle facilities. High Court chief judges will receive Rs 90,640, High Court judges Rs 84,590, district judges Rs 77,110, and officials of constitutional bodies and the parliamentary secretariat will receive salaries according to the updated scale.
Minister calls for investment in commercial cotton farming
Minister for Industry, Commerce and Supplies Gauri Kumari Yadav has urged private investors and agricultural enterprises to invest in large-scale commercial cotton farming to support the revival of Nepal’s textile industry. During discussions with Minister for Agriculture and Livestock Development Gita Choudhary, officials identified districts such as Dang, Banke, and Bardiya as suitable for expanded cotton cultivation. The government believes domestic cotton production could reduce dependence on imported raw materials, create rural employment, and increase farmers’ incomes. Department of Industries Director General Jitendra Basnet said the valuation of assets and liabilities for restarting the long-closed Butwal Spinning Mill is in its final stage. The effort is expected to complement the reopening of Hetauda Textile Industry and help establish an integrated production chain from cotton cultivation to finished textile products.
Landslides keep Tatopani border closed for 26 days
The Tatopani border point has remained completely closed for 26 days after repeated landslides along the Barhabise-Kodari road disrupted trade between Nepal and China. The disruption began after major mudflows struck the Kodari area of Bhotekoshi Rural Municipality-2 on July 16. Additional blockages occurred along the Araniko Highway at Daklang on July 19 and Liping Bazaar on August 4. Officials said about 500 cargo containers are stranded in China and 46 containers remain stuck in Kodari, carrying goods worth more than Rs 20 billion. The prolonged closure has halted customs revenue collection at a time when the border office is targeting Rs 25.25 billion in annual revenue, and has affected traders, transport operators, and daily wage workers ahead of the festive season.
Speaker Aryal urges business groups to stay out of political disputes
Speaker Dev Prasad Aryal has urged business and professional organizations to avoid involvement in political disputes and concentrate on the development of their respective sectors. Addressing the 59th annual general meeting of the Nepal Association of Tour and Travel Agents, Aryal emphasized the need to focus on tourism promotion, business growth, tourist safety, and service quality in airlines, taxis, hotels, and other tourism-related services. He also called for the establishment of an organized tourist bus park in the Kathmandu Valley, reforms in Nepal Airlines Corporation, efforts to remove Nepal from the European Union’s air safety list, and equal treatment for domestic and foreign travelers. Aryal stressed the importance of good governance, economic prosperity, and anti-corruption measures.
Minister Lamsal reviews connectivity projects in Sudurpashchim
Minister for Infrastructure Development Sunil Lamsal said the Sudurpashchim provincial government has allocated funds to improve regional connectivity by constructing paved roads linking municipal centers and developing double-lane highways connecting all district headquarters. Speaking during a monitoring visit in Dhangadhi on Friday, Lamsal said the government has secured budgetary resources for 314 kilometers of priority road construction, urban road upgrades under expanded metropolitan programmes, and targeted bridge projects. He said the province is focusing on areas that have historically received limited infrastructure investment and urged local stakeholders to submit priority connectivity proposals so that administrative support and implementation can be accelerated.
Minister Paudel calls for stronger public-private cooperation in tourism
Minister for Culture, Tourism and Civil Aviation Khadak Raj Paudel has said the government is committed to strengthening Nepal’s tourism sector through closer cooperation with the private sector. Speaking at the 59th annual general meeting of the Nepal Association of Tour and Travel Agents, Paudel said the government is working to address structural and policy obstacles affecting tourism development. He announced that the Nepal Academy of Tourism and Hotel Management will introduce graduate and postgraduate programmes focused on wellness tourism. He also reiterated plans to restructure Nepal Airlines Corporation under a Public-Private Partnership model to improve efficiency and support sustainable economic growth.
Rs 220 million Butwal abattoir remains unused
A modern abattoir built in Ramanagar of Butwal Sub-Metropolitan City-10 at a cost of about Rs 220 million has remained unused despite government efforts to enforce the Animal Slaughterhouse and Meat Inspection Act nationwide. The facility was handed over to Muktinath Livestock Bank under a Public-Private Partnership model on May 30, 2024, but operations stopped after a few months due to disputes between the municipality and the operating company. The disagreements reportedly involved unmet contractual obligations, low commercial use, and failure to control unregulated local meat processing. The facility, which includes cold storage and hygienic slaughter units, is currently lying idle with overgrown vegetation, disconnected electricity, and neglected security structures, raising concerns about the gap between national food safety policy and local implementation.
PPMO blacklists four construction and supply companies
The Public Procurement Monitoring Office (PPMO) has blacklisted four construction and supply companies for delays and contractual non-compliance in public projects. The decision, made effective on August 13 under Section 63(1) of the Public Procurement Act, 2007, imposes a three-year ban on Purna Nirman Sewa of Bajura. One-year bans have been imposed on Sayed Ghazi Fateh Construction Service of Banke, GDS Construction of Kalikot, and Team Asia Nepal Pvt. Ltd. of Kathmandu. The PPMO said the action was taken following recommendations from infrastructure offices, universities, and audit-related agencies. During the blacklist period, the companies and their principal operators will be barred from participating in government procurement and public tenders.
Mineral extraction revenue drops 44 percent
The Department of Mines and Geology collected Rs 894.8 million in revenue during fiscal year 2025/26, recording a decline of about 44 percent compared with Rs 1.59 billion collected in the previous fiscal year. The department is responsible for promoting industrial development through the exploration and extraction of domestic mineral resources. It issues exploration licenses, operating permits, and lease renewals for minerals including limestone, red clay, quartz, tourmaline, talc, kyanite, marble, iron, zinc, magnesite, dolomite, and copper. Despite the fall in revenue, the department said it continues to carry out geological mapping, drilling studies, seismic monitoring, and technical supervision to support mineral-based industries and geotechnical research.
Tumlingtar-Sitalpati transmission line project transfers compensation land to Forest Office
The Tumlingtar-Sitalpati 220 kV Transmission Line Project of the Nepal Electricity Authority has acquired and transferred compensation land to the Division Forest Office in Sankhuwasabha in exchange for forest areas used during construction. The project purchased 28.48 hectares of land spread across 71 plots in Pakhaphan Municipality-4 to compensate for national forest land utilized in Khadbari Municipality wards 2, 8, 9, and 10, and completed the formal registration transfer. Meanwhile, the 24.92 MW Induwakhola Hydropower Project in Makalu Rural Municipality-5 has deposited more than Rs 25.2 million in government revenue for forest management and tree-felling charges related to the removal of 607 trees from forest areas.
13 families in Jhapa receive land ownership certificates
The District Land Problem Resolution Committee, Jhapa, has distributed land ownership certificates to 13 families in wards 3 and 6 of Kankai Municipality. The beneficiaries include landless settlers, landless Dalits, and unregulated residents. According to the committee, the certificates cover both residential and agricultural land. The distribution has granted legal ownership to families who had been living on the land for years without formal documentation. The government says resolving the land problems of landless Dalits, settlers, and unregulated dwellers remains a priority.
Mechinagar launches zero arrears campaign to address financial irregularities
Mechinagar Municipality has launched a “Zero Arrears Campaign” to address long-standing financial irregularities dating back to the municipality’s establishment in fiscal year 1996/97 and the former Village Development Committee period. The campaign is being implemented under Rules 89 and 90 of the Economic Procedure and Financial Accountability Regulations, 2020. Municipal authorities have issued public notices urging individuals and organizations to clear pending dues. Future phases of the campaign will involve business associations and may include the public disclosure of chronic defaulters. According to the Office of the Auditor General’s report for fiscal year 2024/25, the municipality recorded annual arrears of Rs 149.9 million and previous uncleared dues of Rs 813 million, bringing total outstanding financial irregularities to Rs 962.9 million.
Dharan passes Rs 2.76 billion annual budget
Dharan Sub-Metropolitan City has approved an annual budget of Rs 2.76 billion for the current fiscal year during the 19th municipal assembly held on Thursday. Acting Mayor Ayindra Bikram Begha presented the budget, allocating Rs 2.47 billion for the municipal executive and Rs 287 million for the city’s 20 ward offices. The budget prioritizes road networks, physical infrastructure, drinking water supply, education, healthcare, and employment generation. Funding sources include Rs 1.40 billion in internal revenue, Rs 862 million in federal grants, Rs 91.6 million in provincial grants, Rs 328.89 million through revenue sharing, Rs 10 million from the Road Board, and Rs 70 million carried over from the previous fiscal year.
Nepal Embassy in New Delhi to revise consular service fees
The Embassy of Nepal in New Delhi has announced that consular service fees currently charged in US dollars will be revised and collected in Indian rupees from August 17, 2026. In a notice issued on August 14, the embassy said the revised charges were calculated by converting the existing fees approved by the Government of Nepal into Indian currency. The embassy has requested service seekers to take note of the new fee structure, which will come into effect from Monday, August 17.
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