KATHMANDU: Welcome to Nepal News’ Evening Economic Brief, your essential update on Nepal’s key financial developments. Stay ahead with concise insights on market trends, economic indicators, and policy shifts. Whether it’s stock movements, foreign exchange reserves, or major financial decisions, we deliver the most relevant data in a clear, digestible format. This economic briefing keeps you informed on Nepal’s evolving economic landscape. Here are today’s top updates:

NEPSE Falls by 21.63 Points, Turnover at Rs. 6.83 Arba: The Nepal Stock Exchange (NEPSE) dropped 21.63 points (0.79%) today, closing at 2,714.85. The market saw a total turnover of Rs. 6.83 Arba, with 13.97 million shares traded across 316 companies. Himalayan Reinsurance Limited (HRL) led in turnover at Rs. 58.66 Crores, closing at Rs. 1000. Samudayik Laghubitta (SLBSL) gained the most (8.19%), while Green Development Bank (GRDBL) fell the most (-7.91%). The Trading Index gained 4.92%, while the Development Bank Index dropped 2.25%.

HoR Endorses Proposal to Amend Economic Procedure and Fiscal Responsibility Bill: The House of Representatives endorsed the proposal to consider the Economic Procedure and Fiscal Responsibility (First Amendment) Bill, 2081 BS. Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel stated that the bill aims to strengthen budget implementation and fiscal discipline. He acknowledged challenges in meeting general expenditures and ensuring project implementation. Lawmakers raised concerns over revenue leakage, shrinking foreign aid, rising public debt, and lack of capital expenditure. Paudel emphasized prioritizing high-impact projects and amending the Public Procurement Act to improve economic management. Several lawmakers participated in the discussion, highlighting the urgency of fiscal reforms.

Capital Gains Tax from Share Trading Surges: The Nepalese government’s capital gains tax revenue from share trading has tripled in one year, reaching NPR 12.2 billion in just eight months of the current fiscal year.

Data from CDSC shows a 3.79% rise compared to last year’s same period. The surge in NEPSE index and investor profits boosted tax collection. In February alone, NPR 1.33 billion was collected. Investors pay 5% tax on long-term gains and 7.5% on short-term. Corporate and stock dealers also contributed. July recorded the highest tax collection at NPR 4.27 billion due to increased trading activity.

NEPSE CEO Shortlist Announced, Final Selection on Chaitra 6: The selection committee for the Nepal Stock Exchange (NEPSE) CEO has shortlisted five candidates: Chudamani Chapagai, Narad Kumar Luintel, Purna Prasad Acharya, Badri Prasad Pyakurel, and Hemant Basyal. They will present their business plans and face interviews on Chaitra 6 at the Ministry of Finance. The committee, led by Sebantak Pokharel, will recommend one candidate, with the final appointment made by the Council of Ministers. The transparent selection process aims to bring strong leadership to NEPSE, shaping the future of Nepal’s stock market.

NRB to Collect NPR 40 Billion in Deposits: Nepal Rastra Bank (NRB) will collect NPR 40 billion in deposits from the banking system through a 21-day deposit collection instrument. Interested Class “A”, “B”, and “C” banks and financial institutions can bid until 3 PM today. The minimum bid amount is NPR 100 million, with increments of NPR 50 million. The interest rate will be determined through bidding, and principal plus interest will be repaid on Chaitra 24. This measure is aimed at managing excess liquidity in the financial system.

Banks Shift Focus to Loan Recovery Amid Rising Bad Debt: With bad loans increasing, Nepali banks have prioritized loan recovery over new lending from Chaitra. Usually, banks focus on recovery in the fourth quarter, but this year, they have started early due to rising non-performing loans (NPLs), which reached 4.5% in Q2. Several banks face high distributable losses and capital pressure, limiting dividend distribution. Banks struggle to recover loans from real estate, SME, and construction sectors, with collateral auctions failing due to falling property prices. The tightened monetary policy and economic slowdown further complicate recovery efforts, forcing banks to intensify collection measures before the fiscal year ends.

Government Moves to Remove Savings Cap in Cooperatives: The government is set to remove the individual savings limit in cooperatives through a replacement bill, just two months after introducing the cap via an ordinance. The December ordinance had restricted individual savings to Rs 1–5 million, depending on a cooperative’s operational scope. However, following pressure from cooperative organizations, Minister Balram Adhikari has proposed linking the cap to 10% of a cooperative’s primary capital fund instead. The bill also modifies board tenure limits and revises the appointment process for the Cooperative Regulatory Authority. Meanwhile, depositors remain uncertain as key reforms remain unimplemented.

Customs Bill Proposes Up to 200% Fine for False Declarations: The Finance Committee of the House of Representatives has approved a provision in the Customs Bill imposing a fine of up to 200% of the declared value for false customs declarations. If importers misdeclare product details such as material, size, or type, customs officers can impose fines, confiscate goods, or collect duties. The bill also allows post-clearance inspections, with further discussions set for the next committee meeting.

Health Minister Calls for Joint Effort to Strengthen Insurance Fund: Health Minister Predeep Paudel has urged provincial and local governments to share responsibility for the national health insurance scheme. He emphasized pooling funds from all three tiers of government to strengthen the Rs 30 billion insurance fund. The budget will increase from Rs 3 billion to Rs 10 billion, with additional funding from taxes on pollution, sugar-based products, tobacco, and alcohol. A one-door financial management system will be introduced. A report led by Dr. Shambhu Acharya recommends expanding coverage, integrating free healthcare, and revising premium models to make health insurance more effective and sustainable.

Mahat Proposes Privatization of Nepal Airlines: Former Finance Minister Dr. Prakash Sharan Mahat has proposed selling a majority stake in Nepal Airlines to the private sector, arguing that government ownership is unsustainable. Speaking in Parliament, he cited Air India’s revival under Tata Group, emphasizing that state-run enterprises struggle globally. Mahat stressed that private investment drives economic growth, urging Nepal to ease regulations and attract foreign capital. He highlighted past reforms in aviation and hydropower, crediting them for increased revenues. He warned against nostalgic beliefs in state ownership, advocating for a business-friendly environment to boost employment, infrastructure, and economic prosperity.

Government to Seize Properties of Six Individuals for Corruption and Crime: Home Minister Ramesh Lekhak has decided to seize the properties of six individuals found guilty of corruption and criminal activities by the Supreme Court. These include former bureaucrats, officials, and their family members: Amonananda Mishra, Saraswati Dhungana, Murari Bahadur Karki, Keshar Jung Khadka, and Ramagna Chaturvedi, along with Indian citizen Sarita Giri Rai. The seized properties in Kathmandu Valley will either be auctioned or transferred to the government, following land administration laws. The Home Ministry has begun enforcing the decision, ensuring that illegally acquired assets are no longer used by offenders.

Government’s Flexible Budget Cap May See Further Increase: The government has received a flexible budget cap of Rs. 19.60 trillion for the upcoming fiscal year, but some officials believe there is room for further expansion. While numerical estimates suggest an increase is possible, practical constraints remain within this limit. The cap is based on a projected 10% revenue growth. The National Planning Commission, which oversees budget estimates, has advised adhering to this limit, emphasizing that revenue growth will be the key factor in determining any possible budget expansion.

Real Estate Market Remains Stagnant Despite Lower Interest Rates: Despite interest rates dropping to single digits, Nepal’s real estate market has failed to rebound. Investors remain cautious, waiting for prices to fall further, resulting in stable transaction volumes. In February, 46,061 land and property deeds were registered, almost the same as January’s 46,069. The banking system holds around Rs. 700 billion in liquidity, but credit disbursement remains sluggish. The average loan interest rate has fallen to 8.55%, while deposit rates stand at 4.62%. Despite stagnant transactions, real estate revenue in February reached Rs. 4.12 billion, slightly higher than January’s collection.

Nepal Targets 28,500 MW Hydropower by 2035 Amid Challenges: Nepal’s hydropower production has reached 3,400 MW, with an ambitious government plan to generate 28,500 MW by 2035. The roadmap envisions exporting 15,000 MW while consuming 13,500 MW domestically. However, financing remains a major challenge, requiring $46.5 billion. Experts highlight issues like policy hurdles, slow project execution, and environmental concerns. Large reservoir projects and cross-border transmission lines with India and Bangladesh are in progress. The government plans policy reforms, financial incentives, and foreign investment facilitation. While technically feasible, experts stress that strong political commitment and private sector collaboration are crucial for achieving Nepal’s energy ambitions.

Gwarko Flyover Faces Further Delays Due to Structural Issues: The much-anticipated Gwarko flyover faces further delays after a joint gap widened on a concrete panel due to ground subsidence. A 40-meter panel on the Satdobato side was removed, forcing the contractor to restart the work. Originally awarded to Ashish Samanantar Religare JV in February 2022, the project missed its February 2024 deadline, leading to extensions until December 2024. The contractor, penalized Rs 85,000 per day, has now begun piling work to stabilize the structure. The prolonged construction has worsened traffic congestion and air pollution, frustrating commuters in the busy Ring Road intersection.

Minister Gurung Urges Local Levels to Regulate Hoarding Board Advertisements: Minister for Communications and Information Technology, Prithvi Subba Gurung, emphasized that local governments are losing significant revenue from hoarding board advertisements. Speaking at a capacity development program by the Advertisement Board, he urged local authorities to regulate and secure ad revenues. He also proposed revising the Advertisement Act to oversee social media ads and standardize media houses. The government plans to amend the Advertisement Regulations, 2077 BS, to address declining ad revenues for mass media. Officials highlighted the need for a systematic approach to advertisement management while ensuring transparency in public welfare advertisements.

Jagdamba Motors Unveils TVS Ntorq Race XP Black in Nepal: Jagdamba Motors, the official distributor of TVS in Nepal, has launched the Ntorq Race XP Black, Nepal’s first 125cc scooter with over 10 PS power. Designed for thrill-seekers, it features dual ride modes (Street & Race), voice assist technology, and a race-inspired matte black finish. The scooter reaches 0-60 km/h in 8.3 seconds with a 98 km/h top speed. TVS aims to redefine urban mobility in Nepal.

Returnee Worker Finds Success in Shiitake Mushroom Farming: Antaram Joshi of Ganyapadhura, Dadeldhura, has become the first in the district to cultivate shiitake mushrooms. After working in India and Malaysia, he planned to migrate to Poland but changed his mind while working at a mushroom farm in Kathmandu. With support from local authorities, he started farming with 50 bales in 2079 BS and now cultivates over 700. Earning Rs. 50,000–60,000 monthly, he aims to expand to 2,000 bales and establish a model farm in Sudurpashchim Province.

Gold and Silver Prices Decline in Nepal: Gold prices in Nepal have dropped by Rs 400 per tola, now trading at Rs 174,100, according to the Nepal Gold and Silver Business Federation. Silver is priced at Rs 2,450 per tola. In the international market, gold is currently being traded at $2,986 per ounce.