KATHMANDU: Economic Digest offers a concise yet comprehensive overview of significant business happenings in Nepal, presented in easily digestible summaries.
Nepal’s economic landscape presents a mixed picture of cautious optimism and persistent structural challenges. While the NEPSE index showed slight growth and life insurance premiums rose significantly, falling market turnover and continued gold price declines reflect subdued investor confidence.
Government efforts to stimulate economic activity are evident in substantial investments into public institutions and the push to privatize defunct state-owned enterprises. However, issues like weak loan demand—with banks sitting on Rs 842 billion in liquidity—and underwhelming agricultural progress, including poor paddy transplantation and a sharp drop in mango output, signal deeper inefficiencies.
Meanwhile, regulatory bodies such as the Nepal Insurance Authority and DRI have intensified enforcement actions, pointing to rising scrutiny across sectors. In parallel, promising developments in hydropower construction and cross-border trade agreements highlight ongoing attempts to diversify the economy and attract investment, even as industrial growth remains sluggish in regions like Karnali.
NEPSE index rises slightly, daily turnover declines
The Nepal Stock Exchange (NEPSE) index climbed by 9.19 points on Monday, closing at 2,631. Despite this modest rise, market turnover dropped from Rs 7.12 billion on the previous trading day to Rs 6.38 billion today. A total of 145 companies saw their share prices increase, while 103 experienced declines, and most sectoral indices ended the day in positive territory.
Gold prices down again
Gold prices have declined by Rs 300 on Monday, continuing their downward trend. According to the Federation of Nepal Gold and Silver Dealers’ Association, gold now trades at Rs 188,100 per tola. In contrast, silver prices increased by Rs 10 and was set at Rs 2,150 per tola.
Govt adds Rs 15.24 billion in loans and equity to support public institutions
To bolster public sector entities, the government has injected Rs 15.24 billion in the current fiscal year through loans and equity investments. According to the Ministry of Finance, this includes Rs 348.9 million in foreign equity, Rs 2.89 billion into government-owned institutions’ equity, and Rs 12.51 billion in loans. These investments encompass funding from the Asian Development Bank (ADB) and the World Bank.
DRI files cases against 321 people over Rs 10 billion in tax evasion and FOREX misuse
Over the past ten months, the Department of Revenue Investigation (DRI) has initiated legal proceedings against 321 individuals in high and district courts. They face allegations of revenue leakage and foreign-exchange irregularities amounting to over Rs 10 billion. The DRI is seeking restitution of the evaded funds and prison sentences of up to five years, depending on the severity of the offenses.
Nepal Insurance Authority sanctions over two dozen companies
The Nepal Insurance Authority has taken action against more than 25 insurance firms for regulatory non-compliance, data inaccuracies, and standard violations. In the initial phase, it has formally warned directors and CEOs. Under Section 34 of the Insurance Act 2079, the authority is empowered to issue warnings, impose penalties, or even revoke operating licenses as necessary.
Govt moves to sell four defunct state-owned enterprises
The government has launched an initiative to privatize four non-operational state-owned enterprises. In the first phase, the Ministry of Finance is appointing consultants to appraise the assets of Janakpur Cigarette Factory, Butwal Spinning Mill, Nepal Metal Company, and Nepal Orient and Magnesite, and has invited expressions of interest for this assignment.
Banks sitting on Rs 842 billion in liquidity amid weak loan demand
With loan demand underperforming expectations, commercial banks and financial institutions currently hold Rs 842 billion in excess liquidity. As of Thursday, the credit-to-deposit ratio was 78.05%—well below the regulatory maximum of 90%—showing that nearly 12% of deposits remain undisbursed by banks.
Life insurance business grows by 15.29% in the current fiscal year
Life insurance premiums have grown by 15.29% so far this fiscal year. By June 15, companies had collected Rs 154.05 billion in premiums, compared to Rs 133.63 billion during the same period last year. This increase involves all 14 life insurers operating in the market, as reported by the Nepal Insurance Authority.
TIA aviation fuel depot at risk, relocation stalled by land-transfer delay
According to ICAO standards, fuel storage at international airports must be situated at least 90 meters from runways. The existing depot at Tribhuvan International Airport (TIA) lies just 80 meters away. Nearly a year after deciding to relocate, the process remains stalled because the Civil Aviation Authority of Nepal (CAAN) has not yet transferred the required land to the Nepal Oil Corporation’s Sinamangal fuel depot.
Nepal and India’s business chambers sign agreement to boost cross-border trade
To strengthen bilateral economic ties, the Nepal India Chamber of Commerce and Industry (NICCI) and India’s FICCI have signed a cooperation agreement aimed at promoting trade, investment, and cross-border commerce. The pact was signed in New Delhi by NICCI President Sunil KC and FICCI General Manager Jyoti Vij. The two bodies will exchange trade delegations, share non-confidential information, and jointly host promotional events.
Only 20.3% of paddy transplantation completed nationwide
As of Asar 15 (June 29), just 20.3% of paddy planting has been finished nationwide, according to the Ministry of Agriculture and Livestock Development. Sudurpashchim Province leads with 49.2%, followed by Karnali (39.1%), Gandaki (28.2%), Lumbini (24.3%), Bagmati (20.5%), Koshi (14.3%), and Madhesh at the lowest with only 3.9%, due to delayed monsoon onset.
Karnali Province still lags behind in industrial development
Karnali Province remains underindustrialized, hosting only about a dozen major economic enterprises according to the 2018 National Economic Census. Lacking significant industries, the region also faces chronic unemployment. Hydropower projects are mostly still in the study stage, hindered by an investment unfriendly environment, which constrains internal revenue generation.
Gokarna Awasthi resigns from Securities Board of Nepal
Gokarna Awasthi has resigned from his seat on the Securities Board of Nepal (SEBON), where he represented the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) and held the position of Director General. Board spokesperson Niranjay Ghimire stated Awasthi cited time constraints as his reason for stepping down.
Construction of 140 MW main dam at Tanahun Hydropower Project in full swing
Construction of the main dam at the 140 MW Tanahun Hydropower Project in Rishing Rural Municipality-1, Jhapputar of Tanahu is progressing rapidly. This is Nepal’s first major reservoir-based concrete dam. According to project chief Shyamji Bhandari, concrete blocks have already been raised an average of 10 meters above the foundation of what will become a 140-meter-high structure.
Mango production in Siraha falls by nearly 40%
Mango output in Siraha has dropped by almost 40% this year. The Agricultural Knowledge Centre reports total production at 59,866.5 metric tons—down from 99,235 metric tons last year. Of the 9,025 hectares under mango cultivation, only 8,895 hectares were productive this season.
Karnali Province to develop hydropower with local government and private sector investment
The Karnali Province government has introduced a new initiative to develop hydropower projects through joint investments by local governments and private entities starting in fiscal year 2082/83 (2025/26). The provincial budget outlines plans to conduct feasibility studies for projects of up to 20 MW capacity within its jurisdiction.
IPO opens for 100% rights offering of Terhathum Power Company
Terhathum Power Company has opened applications for its 100% rights share offering. Shareholders listed as of Jestha 4 (May 18) are eligible to apply for the 4 million shares being issued. Nabil Investment Banking is managing the issue. Applications can be submitted through ASBA-member banks and financial institutions. The company posted a net profit of Rs 22 million in the last fiscal year.
Soil testing camps promote scientific farming in Banke
Soil testing camps held in Nepalgunj Sub-Metropolitan City, Kohalpur Municipality, and Rapti Sonari Rural Municipality are promoting scientific agricultural practices among local farmers. Tests assess soil pH, levels of nitrogen, phosphorus, and potassium, as well as micronutrient and organic matter content. Binod Adhikari, head of the Agriculture Knowledge Centre in Banke, noted that soil acidity and nutrient imbalances are contributing to higher plant disease rates, weakened crops, and reduced yields.
Global IME Bank launches paddy farming loan scheme
Global IME Bank has introduced a “Paddy Farming Loan” program on the occasion of National Paddy Day. The scheme supports the government’s rice self-sufficiency target outlined in the FY 2025/26 budget. Farmers can access loans of up to Rs 2 million for seeds, fertilizers, machinery, and other agricultural inputs.
Nabil Bank gets green light to issue Rs 3 billion debenture
Nabil Bank has received approval from the Securities Board of Nepal (SEBON) to issue debentures titled “7% Nabil Debenture 2089.” The issue comprises 3 million units priced at Rs 1,000 each—1.8 million via private placement and 1.2 million through public offering. The debentures have an 8-year maturity and offer an annual interest rate of 7%. Nepal SBI Merchant Banking will oversee the issuance.
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