KATHMANDU: Economic Digest presents a brief yet comprehensive roundup of major business developments in Nepal, delivered in clear and accessible summaries.
Nepal’s economic picture remains mixed, with signs of liquidity management and institutional earnings growth alongside mounting fiscal and structural pressures. The marginal fall in the NEPSE index to 2,622.22 points, despite Rs 3.298 billion in turnover, suggests cautious investor sentiment. The proposed margin lending regulations could deepen the capital market by introducing tools such as securities lending, short selling and intraday trading, but their impact will depend on effective regulation and risk management.
The banking sector presents a contrasting picture. Aggregate net profit rose 32.32 percent and distributable profit increased 21.49 percent, yet only 16 of 19 listed commercial banks appear capable of distributing dividends. This highlights uneven financial health and the continuing burden of non-performing loans.
Monetary and energy developments also point to efforts to manage economic resources. Nepal Rastra Bank’s Rs 35 billion deposit collection indicates active liquidity management, while the Nepal Electricity Authority’s profit decline to Rs 5.04 billion exposes vulnerabilities arising from foreign exchange liabilities, financing costs and depreciation. The proposed seasonal electricity tariff could help absorb surplus monsoon generation and stimulate industrial consumption.
Meanwhile, government spending commitments are expanding. Higher teacher and public corporation salaries will increase recurrent expenditure, while tax exemptions for Gen Z protest victims and reconstruction costs add further fiscal obligations. The Madhesh Province Assembly’s repair expenses illustrate the economic cost of political unrest.
External and domestic trade activity remains relevant, with Ncell paying Rs 4.96 billion toward its license renewal and herb exports generating Rs 140.6 million. However, prolonged restrictions on 5,424 railway-affected land parcels indicate unresolved infrastructure and compensation issues. Overall, the developments suggest an economy balancing liquidity, investment and consumption support against rising public liabilities and structural weaknesses.
NEPSE index slips marginally to 2,622.22 points
The Nepal Stock Exchange (NEPSE) index fell 0.26 points to close at 2,622.22 points on Wednesday. The Sensitive Index and Float Index also recorded marginal declines. A total of 9,508,882 shares of various listed companies changed hands, generating a turnover of Rs 3.298 billion. Of the 13 trading subgroups, five posted gains while eight declined. Share prices of 111 companies increased, 149 declined and 18 remained unchanged. Investors in Sarbottam Paints Industries, Mount Everest Power Development Company and RBB Mutual Fund recorded gains, while those holding shares or instruments of Manakamana Engineering Hydropower Company, ICFC Debenture and Sunrise Bluechip Fund incurred losses.
Gold falls to Rs 304,100 per tola, silver to Rs 4,595
Gold and silver prices declined in the domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of hallmark gold fell by Rs 2,700 per tola to Rs 304,100. Gold had traded at Rs 306,800 per tola on Tuesday. The price of silver also dropped by Rs 160 per tola to Rs 4,595. It was traded at Rs 4,755 per tola on Tuesday.
NRB collects Rs 35 billion through deposit collection instrument
Nepal Rastra Bank (NRB) has collected Rs 35 billion from banks and financial institutions through a six-month deposit collection instrument. The central bank had invited bids for a 180-day deposit collection instrument, with the online bidding process concluding at 3:00 pm. The interest rate was determined through competitive bidding, while the principal and interest are scheduled to be repaid on February 15, 2027. Eligible bidders were licensed Class A, Class B and Class C financial institutions. Each institution could submit bids starting from Rs 100 million and in multiples of Rs 100 million, up to the total amount sought by the NRB. The accounts of successful bidders were debited for the allotted amounts. Institutions failing to meet their obligations face penalties, including blacklisting and suspension from participating in future auctions.
NOC distributes over 4 million LPG cylinders in a month
Nepal Oil Corporation distributed 4,036,364 cooking gas cylinders between July 17 and August 16, according to data released by the state-owned enterprise. The latest monthly distribution marks a significant increase compared with previous months. The corporation had distributed 2,732,355 cylinders in Chaitra 2082, 2,257,493 from mid-April to mid-May, 2,312,837 in another monthly period and 3,136,937 from mid-June to mid-July. The number of cylinders distributed from mid-July to mid-August was around 900,000 higher than in the preceding month. Officials attributed the rise in demand to seasonal changes in consumption and increased household cooking gas use across the country.
Govt announces full tax exemption on vehicles for families of Gen Z protest victims
The government has announced a 100 percent tax exemption on the purchase of certain motor vehicles for families of martyrs and injured individuals associated with the Gen Z protest. According to a notification published in the Nepal Gazette by the Ministry of Finance, the concession is intended to support the economic self-reliance of affected families. The exemption applies to petrol and diesel vehicles costing up to Rs 1.5 million and electric vehicles priced up to Rs 2 million. The facility does not cover specialized vehicles such as snow vehicles, golf carts, racing cars or unassembled vehicles. Beneficiaries must verify their eligibility through officially issued identity cards. The tax exemption is applicable only during the current fiscal year 2026/27.
NEA’s annual profit falls for second consecutive year to Rs 5 billion
The Nepal Electricity Authority (NEA) has reported a second consecutive annual decline in profit, with its pre-tax profit falling to Rs 5.04 billion in fiscal year 2025/26. The utility’s pre-tax profit was Rs 9.06 billion in fiscal year 2024/25, meaning it declined by Rs 4.02 billion in the latest fiscal year. According to the NEA, a sharp rise in foreign exchange liabilities, which increased by 272.86 percent due to currency fluctuations, contributed significantly to the decline. Higher depreciation costs, financing expenses and impairment provisions also put pressure on the authority’s financial performance. The latest decline follows a 37.32 percent reduction in profit in the previous fiscal year, indicating continued financial pressure on the state-owned power utility.
Electricity tariff review committee considers seasonal concessions
The government has begun work on reducing electricity tariffs to encourage domestic consumption and minimize the wastage of surplus power during the rainy season. Following a proposal from Energy, Water Resources and Irrigation Minister Birendra Bahadur Shrestha, a tariff review committee was formed on July 29, 2026. The committee, coordinated by Nepal Electricity Authority board member Anshukiran Shahi, held discussions at the ministry on possible seasonal tariff adjustments. Officials said surplus electricity generated during the monsoon has been going unused, resulting in significant monthly financial losses. The committee is considering a seasonal tariff structure that would provide electricity to consumers and industries at concessional rates. Discussions have also focused on ways for industries to pass the benefits of lower electricity costs on to consumers through reduced prices of goods and services.
Govt directs public corporations to implement salary and grade increments
The federal government has directed public corporations, autonomous bodies, boards, state-owned enterprises and statutory committees to provide salary and grade increments to their employees in line with the adjustments granted to civil servants. The decision was taken by the Cabinet and followed by administrative instructions from the Ministry of Finance. The revised pay scales will take retrospective effect from July 17, the beginning of the current fiscal year. Under the new provisions, institutions that already provide incentive allowances above the government-prescribed level will only be required to cover the difference. Any future incentive payments must be linked to employee performance. The salary adjustment is expected to benefit thousands of employees of public institutions while preventing the creation of unauthorized financial liabilities.
Only 16 commercial banks in position to distribute dividends
Commercial banks’ total distributable profit increased by 21.49 percent to Rs 33.938 billion in the last fiscal year, up from Rs 27.934 billion a year earlier. Of the 19 listed commercial banks trading on the Nepal Stock Exchange (NEPSE), 16 have sufficient distributable profits to potentially provide dividends to shareholders. However, some banks recorded negative distributable profits. NIC Asia Bank posted the largest negative distributable profit at Rs 14.865 billion. Despite the challenges, aggregate net profit of commercial banks increased by 32.32 percent to Rs 69.886 billion. Rising non-performing loans, however, continue to affect the banks’ ability to distribute profits to shareholders.
Govt raises pay grants for teachers and school staff
The government has increased remuneration grants for teachers under the federal teaching support quota, Early Childhood Development (ECD) facilitators, school staff and school helpers. The increase follows a Cabinet decision based on a proposal from the Ministry of Education and Sports. Monthly remuneration for secondary-level teachers has been raised from Rs 43,669 to Rs 48,058, while that for basic-level teachers has increased from Rs 34,730 to Rs 38,203, representing a 10 percent rise. Similarly, the monthly grant for ECD facilitators has been increased by Rs 5,000 to Rs 17,000. Grants for school helpers have been raised to Rs 15,000 and those for accounting staff to Rs 20,000. Education Minister Sasmit Pokharel said the decision addressed long-standing concerns of school employees. The increases will create an additional annual financial liability of Rs 4.689 billion for the government.
Madhesh Province Assembly spends Rs 6.8 million to repair damage from Gen Z protests
The Madhesh Province Assembly Secretariat has spent around Rs 6.8 million to repair and replace property damaged or stolen during the Gen Z protests on September 8 and 9, 2025. According to Information Officer Sarendra Mahato, the secretariat spent Rs 1.5 million on painting, Rs 1.9 million on air conditioners, Rs 1.5 million on desktop computers and Rs 1.8 million on furniture. The assembly building was vandalized and set on fire during the protests. The provincial assembly is currently operating from a former education office building, while reconstruction of the damaged assembly premises is being handled separately. The secretariat spent Rs 303.1 million of its Rs 462.3 million budget in fiscal year 2025/26.
Sudurpashchim traffic action generates Rs 31.8 million in fines
Traffic police in Sudurpashchim Province took action against 43,593 vehicles over the past 13 months, collecting Rs 31.8 million in fines. According to the Nepal Police Highway Security and Traffic Management Office in Attariya, 39,212 vehicles were penalized across the province’s nine districts during fiscal year 2025/26. In the first month of the current fiscal year, 4,381 vehicles faced action, generating more than Rs 3.7 million in revenue. Among those penalized during the period were 1,087 drivers caught driving under the influence of alcohol. Motorcycles, jeeps, cars, trucks and tractors accounted for most of the traffic violations. Officials said the rapid increase in the number of vehicles, narrow roads and negligent driving have contributed to the growing risk of road accidents in the province.
Jhapa, Morang and Sunsari landowners seek compensation for frozen railway land
More than 4,000 households in Jhapa, Morang and Sunsari have demanded either immediate compensation or the release of land acquired for the proposed East-West Electric Railway. The government froze 5,424 land parcels covering a 126.75-kilometre stretch from Kakarbhitta to Inaruwa after issuing land acquisition notices on June 6 and 9, 2020. Central Secretary Gyanendra Niraula said affected landowners have been unable to transfer ownership, sell or subdivide their properties or use them as collateral for bank loans for the past six years. The restrictions cover 512.69 hectares of agricultural land, residential areas and river-adjacent areas, leaving thousands of landowners facing financial difficulties. Despite changes in successive governments, affected residents have continued to call on the authorities either to provide compensation based on prevailing market rates or immediately lift the restrictions on their properties.
SEBON publishes draft margin lending regulations for public feedback
The Securities Board of Nepal (SEBON) has published a draft of the proposed Margin Lending Regulations for feedback and suggestions from stakeholders in the capital market. The proposed framework seeks to modernize Nepal’s securities market and bring its regulatory system closer to international practices. Under the proposed arrangement, eligible investors would be able to use their shareholdings as collateral while obtaining financing from brokers to trade securities. The draft was prepared by a committee comprising representatives from SEBON, the Nepal Stock Exchange (NEPSE), CDS and Clearing Limited and the Stock Brokers Association of Nepal. The proposed regulations are also expected to create a regulatory framework for advanced market instruments and practices, including intraday trading, securities lending and short selling.
Ncell pays Rs 4.96 billion toward license renewal fee
Private telecommunications company Ncell has paid Rs 4.96 billion to the Nepal Telecommunications Authority (NTA) as an installment toward its license renewal fee. Although the payment deadline was August 31, Ncell made the payment ahead of schedule on Wednesday. Company officials said the amount includes both the required installment and accrued interest. Ncell had previously paid Rs 3.29 billion in Bhadra last year, following a payment of Rs 2 billion on July 13, 2025. Under the existing arrangement, Ncell is required to pay a total of Rs 20 billion in installments for the five-year license period covering mid-April 2024 to 2030.
Herbs worth Rs 140.6 million exported through Kakarbhitta
Nepal exported more than Rs 140.6 million worth of herbs to India and Bangladesh through the Kakarbhitta border point over the past year. According to the Kakarbhitta Customs Office, a total of 1,108 metric tons of 12 types of herbs were exported during the period. India received 422 metric tons of bay leaves worth more than Rs 26.6 million, while 269 metric tons of chiraito valued at Rs 65.6 million were exported to Bangladesh. Exports to Bangladesh also included 187 metric tons of soapnut, 40 metric tons of canola oil and five metric tons of shatavari. Meanwhile, 12 metric tons of padamchal generated more than Rs 9.4 million in export earnings, while five metric tons of jatamansi fetched Rs 6.3 million. Other exported herbs included 26 metric tons of chutro, 22 metric tons of nagbeli powder, eight metric tons of amla and two metric tons of timur, according to the Plant Quarantine and Pesticide Management Center in Kakarbhitta.
Bhadrakali Temple reconstruction estimated at over Rs 348 million
Reconstruction of the Bhadrakali Temple complex in Kathmandu is progressing in the traditional Newari architectural style. The temple was damaged in the 2015 earthquake, and restoration work began in mid-2024 under the supervision of Kathmandu Metropolitan City. The project is being implemented by Tulsi-Ambuja JV at a cost of more than Rs 348 million. The three-year project includes reconstruction of the main temple as well as rest houses and pavilions on the northern, southern and western sides. The reconstructed complex features traditionally carved wooden doors, windows and pillars, along with traditional tiled roofing. The project covers an area of around 39,000 square feet. A facilitation committee working on heritage and tourism coordination is overseeing the project with the objective of preserving the site’s historical, cultural and religious importance.
Comment