KATHMANDU: Welcome to Nepal News’ Evening Economic Brief—your go-to source on key financial updates in Nepal. Stay informed with concise insights on market trends, economic indicators, and policy shifts. Here are today’s top economic news highlights.

Over Rs 869 Billion in Idle Investable Funds Pile Up in Nepali Banks:
Nepal’s banking and financial institutions are currently sitting on approximately Rs 869 billion in idle investable funds, raising concerns about liquidity management. Despite a significant increase in deposits, credit disbursement has failed to grow proportionately, resulting in a widening gap between available funds and actual loan investment. Experts warn that this imbalance is starting to disrupt the financial system, with banks struggling to channel surplus liquidity into productive sectors. The situation highlights deeper structural issues in credit demand, investor confidence, and policy alignment—underscoring the urgent need for financial reforms to ensure more effective capital mobilization in the economy.

Soybean and Sunflower Oil Trade Soars Through Birgunj with Over Rs 119 Billion in 11 Months:
Crude soybean oil imports through the Birgunj customs point surged by 613.41% to Rs 52.58 billion in the first 11 months of the current fiscal year, up from Rs 7.37 billion last year, according to Birgunj Customs Chief Deepak Lamichhane. Refined soybean oil exports also skyrocketed to 2.58 million liters worth Rs 55.3 billion, compared to just 464,138 liters worth Rs 88.3 million last year. Crude sunflower oil imports reached Rs 9.75 billion, while 38.9 million liters of refined sunflower oil worth Rs 8.4 billion were exported, a massive jump from 527,291 liters last year, highlighting Nepal’s growing re-export trade.

Nepal Urges Malaysian Investors to Expand Ties in Infrastructure, Tourism, and Trade:
Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has called on Malaysian investors to invest in Nepal’s infrastructure and tourism sectors, highlighting Nepal’s investment-friendly environment. Addressing a visiting delegation from the Malaysia-Nepal Business Council, led by President Pradeep Kumar Kukreja, DPM Paudel assured full government support. Delegation members expressed interest in IT, hydropower, trade, and the environment. The council also held separate discussions with FNCCI and NCC to explore trade expansion, investment, and ASEAN linkages. FNCCI’s Anjan Shrestha and NCC’s Kamlesh Agrawal emphasized cooperation, job creation, and trade facilitation to reduce Nepal’s trade deficit with Malaysia.

IMF Urges Nepal to Ensure Central Bank Independence in Draft Law Revision:
The International Monetary Fund (IMF) has recommended removing government interference from Nepal Rastra Bank’s draft law revision to ensure full autonomy. The current draft retains the finance secretary as an ex-officio member and allows government appointment of three board members. Citing global best practices, the IMF has urged scrapping these provisions. Although Nepal’s economic structure differs, the IMF has shown some flexibility. During its recent visit for Nepal’s sixth installment under a $398.8 million loan, the IMF emphasized completing pending reforms, including the NRB Act amendment and bank audits. A final domestic consensus on central bank independence is yet to be reached.

Supreme Court Clears Way for Bank Audit, Boosting IMF Loan Disbursement Prospects:
The Supreme Court has lifted its interim order halting the Loan Portfolio Review (LPR) of 10 major commercial banks, allowing Nepal Rastra Bank (NRB) to resume the audit process. With this decision, prospects have strengthened for Nepal to receive the sixth installment—$42.7 million—under the IMF’s Extended Credit Facility. The audit will be conducted by Bangladesh-based Howladar Yunus & Co., amid earlier legal disputes over its selection. The review will assess loan quality and defaults, addressing IMF concerns about evergreening practices. NRB plans to deploy 22 auditors across banks, with final IMF board approval expected following completion of pending reforms.

Insurance Sector Needs Rs 30 Billion in Asar to Meet GDP Contribution Target:
To meet the estimated 3.69% contribution of total insurance premium to GDP in the current fiscal year, Nepal’s insurance sector must collect at least Rs 30.27 billion in Asar. By the end of Jestha, 93% of the Rs 225.31 billion target had been met. Life insurance companies need to collect Rs 24.21 billion and non-life Rs 6.05 billion in Asar. Asar sees the highest premium collection due to year-end targets and incentive-driven efforts. The Nepal Insurance Authority projects this year’s premium-to-GDP ratio will be the highest in five years, with the economy expected to grow to Rs 6.1 trillion.

Insurance Companies Heavily Invest in Bank Deposits, Avoid Real Estate:
Nepal’s insurance companies have allocated the majority of their investments to fixed deposits in commercial banks, while completely avoiding real estate, despite regulatory permission to invest up to 10% in property. According to Nepal Insurance Authority data, life insurers invested 70.10% and non-life insurers 67.14% of their funds in bank term deposits. By the third quarter of the current fiscal year, life insurers had invested Rs 733.74 billion overall, with Rs 514.42 billion in bank deposits. Experts say the trend reflects a preference for low-risk assets. Riskier sectors like real estate have seen no investment from any insurer so far.

Micro-Insurance Companies Collect Nearly Rs 2 Billion in Premiums in 11 Months:
Nepal’s micro-insurance sector has witnessed notable growth, with seven micro-insurance companies collecting Rs 1.94 billion in premiums over the first 11 months of the current fiscal year (Shrawan to Jestha). Three life micro-insurers issued 16.62 lakh active policies, generating Rs 1.09 billion. Guardian Micro Life led with Rs 413.7 million from 11.2 lakh policies. Meanwhile, four non-life micro-insurers issued 3.39 lakh policies, collecting Rs 849.6 million. Nepal Micro Insurance topped the non-life segment with Rs 237.9 million. The sector’s expansion reflects increasing outreach and coverage among underserved populations, according to Nepal Insurance Authority data.

Hydropower Projects in Lamjung Hit Full Capacity as Monsoon Boosts River Flow:
Hydropower projects in Lamjung district are now operating at full capacity following continuous rainfall that has increased river flow. Major rivers including Marsyangdi, Dordi, Ngadi, and Khudi have seen water levels rise, enabling electricity generation to rebound after winter lows. The 70-MW Middle-Marsyangdi and 50-MW Upper-Marsyangdi-A projects, which had been producing reduced output, are now running at full capacity. Other projects like Super Dordi ‘B’, Ngadi, Dordi Khola, and Upper Dordi ‘A’ have also resumed full-scale generation. Smaller plants, including Siuri, Rudi, Khudi, Midim, Chhyangdi, and Syange, have scaled up as well, bringing total district output to approximately 300 MW.

Malaysian Business Delegation Meets PM Oli, Explores Investment Opportunities in Nepal:
A 20-member delegation from the Malaysia-Nepal Business Council, led by Dato Pradeep Kumar Kukreja of Paradise Group, met former Prime Minister KP Sharma Oli on Saturday to explore investment opportunities in Nepal. During the meeting at Baluwatar, the delegation expressed interest in launching meaningful ventures and understanding Nepal’s business environment. PM Oli assured the government’s commitment to legal and structural reforms to facilitate foreign investment and emphasized continued cooperation with the private sector. The delegation showed interest in sectors such as plastic waste processing, IT parks, and tourism. The three-day visit was coordinated with the Nepali Embassy in Malaysia.

Nepal Scraps Bank Guarantee Requirement for EXIM Code, Easing Trade for Businesses:
Nepal’s Department of Customs has removed the mandatory NPR 3 lakh bank guarantee for obtaining an Export-Import (EXIM) Code under the 16th amendment to the Customs Regulation 2064. This reform, effective immediately, simplifies trade registration and boosts access for small and medium enterprises (SMEs). Commercial banks have been directed to release previously held guarantees. The move frees working capital, reduces paperwork, and accelerates the EXIM Code process. Industry experts say the amendment aligns with global trade facilitation practices and could enhance Nepal’s export diversity and competitiveness. It marks a broader push toward modernizing Nepal’s trade environment.

Indigenous Commission Recommends Shifting Kathmandu-Terai Expressway Starting Point Amid Protests:
The Indigenous Nationalities Commission, led by Ram Bahadur Thapa Magar, has recommended relocating the starting point of the Kathmandu-Terai Expressway. The 71 km expressway, under construction by the Nepali Army, faces prolonged delays in Khokana due to protests from the local Newar community, citing threats to cultural and religious heritage, including the sacred Sikali Temple. The Commission suggests moving the entry point 6–7 km south to Dukuchhap in Godawari Municipality, Ward-8, and building access roads and tunnels to link key points. Despite the proposal submitted to PM KP Oli on Asar 4, the government has yet to initiate formal discussion.

BYD Nepal Import Dispute Sparks Controversy as Dealer Appeals to Chinese Embassy:
A controversy has erupted after BYD’s official distributor for Nepal, Cimex Inc., reportedly sought help from the Chinese Embassy over import delays of the new electric vehicle, Sealion 7. The Department of Transport Management had requested additional documents regarding motor power and embedded SIMs before granting import approval. While the application is still within the legal 15-day review period, Cimex MD Yamuna Shrestha—also head of NADA’s Revenue Committee—appealed to the Chinese Embassy, citing unnecessary restrictions. Industry insiders criticized this move, warning that bypassing regulatory processes through diplomatic pressure sets a dangerous precedent for Nepal’s automobile import and policy enforcement system.

Parliamentary Panel Calls for Transparency on Loan Distribution Among Business Groups:
The Public Accounts Committee of Nepal’s House of Representatives has urged transparency on loan allocations, demanding a detailed disclosure of how much credit various business groups have taken. During discussions on the Banking and Financial Institutions Act (BAFIA) amendment, lawmakers emphasized distinguishing bankers from business borrowers and issuing a public ledger of loan amounts. Governor Dr. Bishwanath Poudel revealed that a small fraction of borrowers hold a large share of loans, raising concerns about credit concentration. Independent lawmaker Dr. Amaresh Kumar Singh called for limits on CEO tenures, more transparency, and incentives for loans in agriculture, energy, and tourism sectors.

Businessman Niraj Govinda Shrestha Enters Aviation Sector:
Non-resident Nepali businessman Niraj Govinda Shrestha has entered Nepal’s aviation sector with the launch of Sumedha Air, a helicopter company licensed to operate three H125 helicopters. The Ministry of Culture, Tourism, and Civil Aviation has granted a domestic air service license, valid until July 1, 2029. Sumedha Air, based at Nalinchowk Helipad in Bhaktapur, is preparing to apply for an Air Operator Certificate (AOC) from the Civil Aviation Authority of Nepal next week. Shrestha, who previously invested in Ncell, banking, and hydropower sectors, returns to Nepal’s business landscape with a major investment in helicopter aviation.

Eco-Friendly Champadevi Cable Car Project Planned in Kirtipur to Boost Tourism:
Champadevi Eco Friendly Company Pvt. Ltd. plans to build a 2.075 km cable car connecting Kirtipur Municipality Ward No. 4 and Dakshinkali Municipality Ward No. 1. The project, costing around Rs 5 billion, aims to serve 5,000 passengers daily with 34 gondolas, each carrying 10 people. The upper station in Kirtipur will feature recreational facilities, a restaurant, and an entertainment building, while parking and a temple will be constructed nearby. The company has submitted an Environmental Impact Assessment to the Ministry of Forests and Environment, pledging environmental protections like tenfold tree planting and wildlife conservation. The project expects to create 312 permanent and 300 temporary jobs.

NEPSE Surges 4.17% as Investor Optimism Grows Ahead of New Fiscal Year:
The Nepal Stock Exchange (NEPSE) index rose 4.17% this week, closing at 2,703.96 points. The market remained in the green all five trading days, with turnover reaching Rs 39.93 billion—up nearly 14%. Trading volume jumped 17.8% to 101.7 million shares. Brokers report increased margin lending as investor confidence strengthens ahead of the new fiscal year starting July 17. Many expect long-pending dividends, fueling optimism. Market capitalization rose to Rs 4,505.19 billion. The Sensitive Index climbed 4.63%, while all sector indices gained. Life Insurance led with an 8.5% surge, followed by Finance, Development Banks, and Non-Life Insurance.

Kathmandu Misses Budget Deadline for First Time; Other Major Cities Announce Rs 28.62 Billion Combined Budget:
For the first time since federalism, Kathmandu Metropolitan City (KMC) failed to present its FY 2025/26 budget by the legal Asar 10 deadline due to internal disputes among Mayor Balen Shah, Deputy Mayor Sunita Dangol, and the Chief Administrative Officer. This procedural breakdown contrasts sharply with Lalitpur, Pokhara, Birgunj, Biratnagar, and Bharatpur, which all met the deadline and unveiled budgets totaling Rs 28.62 billion. Their plans emphasize heritage conservation, youth empowerment, smart classrooms, healthcare access, and infrastructure upgrades. KMC’s failure has raised concerns over governance in the nation’s capital, while other metros push forward with reform-driven agendas.