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

Supreme Court Constitutional Bench Clears Path for Nepal’s Second Stock Exchange: Nepal’s Supreme Court Constitutional Bench has dismissed a writ petition challenging the government’s plan to establish a second stock exchange, removing the final legal hurdle. The bench, led by Chief Justice Prakash Man Singh Raut, ruled in favor of issuing new licenses. With all legal barriers removed, the Securities Board of Nepal (SEBON) is now expected to proceed with licensing, introducing competition to NEPSE, Nepal’s sole stock exchange since 1994, and potentially transforming the country’s capital markets.

Life Insurance Sector Crosses Rs 1 Trillion Mark: Nepal’s life insurance industry has surpassed Rs 1 trillion in total business volume, with 14 major life insurance companies reporting double-digit growth. According to Nepal Insurance Authority’s latest data for the first eight months of FY 2081/82, insurers collected Rs 108.71 billion in premiums, a 10.33% increase from last year. Nepal Life holds the largest market share at 27.04%, followed by National Life (12.53%), LIC Nepal (11.55%), and Himalayan Life (10.32%). Reliable Nepal and Citizen Life recorded the highest growth rates at over 20%. However, Rastriya Beema Company saw a 14.37% decline in premium collection.

Commercial Banks See Surge in Margin Lending Amid High Liquidity: Commercial banks in Nepal have seen a nearly 40% increase in margin lending as of mid-February 2024, with total loans reaching Rs 93.12 billion. The surge is attributed to high liquidity, low credit demand, and NRB’s flexible monetary policies. Banks like Nepal SBI, Machhapuchhre, and Kumari have notably expanded their portfolios, while Nabil Bank remains the largest provider. The rise is driven by a strong stock market, accessible loans, and improved liquidity, with the NRB removing the Rs 200 million cap on institutional margin loans.

NRB Questions CEO Performance Evaluation in Banks: Nepal Rastra Bank (NRB) has raised concerns over the lack of performance evaluation of bank CEOs as per contractual agreements. The central bank’s latest Supervision Report states that banks have failed to assess whether their CEOs are meeting agreed-upon targets. It also highlights delays in board decision reviews and non-disclosure of key policies affecting bank growth. Some banks have not classified risk-weighted assets as per Basel III norms, and NRB has taken action against those violating capital adequacy frameworks. Additionally, some banks have not reported deposits, loans, and capital reserves correctly, and have failed to reduce bad loans.

Agreement Reached on Equal Benefits for Upper Tamakoshi Workers: An agreement has been reached between Upper Tamakoshi Hydropower Project management and Dolakha-based employees to provide equal benefits to all workers. The protest by Dolakha employees, who claimed discrimination in additional allowances, ended after the management agreed to provide 75% extra allowances to all staff, up from 50% for local employees. The agreement also includes provisions for contract workers to work full-time, receive formal contracts, and be placed in relevant job categories. The project, operated by Upper Tamakoshi Hydropower Ltd., has faced disruptions, including damage from an October landslide that killed four people.

IPPAN President Urges Indian Investors to Capitalize on Nepal’s Hydropower Potential: The Independent Power Producers’ Association, Nepal (IPPAN), has urged Indian investors to invest in Nepal’s hydropower sector. Speaking at the Nepal-India Energy Conference, Karki emphasized Nepal’s target to generate 28,500 MW of electricity by 2035, requiring US$ 46.5 billion in investment. With Nepal’s private sector contributing 80% of the installed capacity and strong policies in place, Karki invited Indian companies to explore opportunities, including solar energy projects and cross-border energy trade.

SEBON Introduces Broker Merger Directive to Meet Capital Requirements: The Securities Board of Nepal (SEBON) has launched the Broker Merger Directive, allowing brokerage firms to merge in order to meet the new capital requirements. In 2022, SEBON raised the minimum paid-up capital for brokerage firms from Rs. 2 crore to Rs. 20 crore. While newly licensed brokers have met this requirement, many older firms are still struggling. Of the 50 firms licensed before the change, 28 remain undercapitalized and may now merge to comply.

Kulman Ghising Files Writ Petition Against Removal as NEA MD: Kulman Ghising has filed a writ petition at the Supreme Court challenging the government’s decision to remove him from his position as Managing Director of the Nepal Electricity Authority (NEA). The petition, filed by his representative Advocate Lokmani Pokharel, seeks a stay order on the government’s decision and requests that Ghising be allowed to continue in his role. The petition names the Office of the Prime Minister, the Council of Ministers, and the Ministry of Energy as defendants. This comes after Ghising was replaced by Hitendra Dev Shakya, who has already assumed the role of MD.

Finance Minister Highlights Lumbini Province’s Investment Potential: Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has emphasized Lumbini Province as a significant investment destination. In a discussion organized by Kantipur Media Group in Rupandehi, he urged the private sector to invest in the province, assuring that the government is committed to creating an investment-friendly environment. Paudel expressed hope that Lumbini would drive national economic growth, contributing to urban, education, health, and industrial development. He also assured that Gautam Buddha International Airport would soon operate at full capacity.

Ruling Parties Discuss New Land Ordinance Bill in Meeting: The ruling parties have discussed the ordinance related to land and are preparing to introduce a new land management ordinance in parliament. The meeting, held at the Prime Minister’s official residence in Baluwatar on Wednesday, addressed concerns raised by the Janata Samajbadi Party Nepal (JSP). Nepali Congress Chief Whip Shyam Kumar Ghimire stated that a consensus is nearly reached, with the Prime Minister clarifying concerns raised by JSP. Key leaders, including Prime Minister KP Sharma Oli, Sher Bahadur Deuba, Upendra Yadav, and others, attended the meeting.

Centre Plaza Fire in Itahari Under Control After Six Hours: A fire that broke out at Centre Plaza in Itahari this morning was brought under control after six hours. Around 300 personnel from Nepal Police, Armed Police Force, and Nepali Army, along with 12 fire engines, worked to douse the blaze. Eleven people, including Bangladesh national MD Jay and Nepali citizens, were rescued safely. The Ministry of Home Affairs dispatched a Nepali Army helicopter for the rescue. The cause and extent of the damage are under investigation.

11 Indian Nationals Arrested for Online Gambling and Crypto Transactions Worth Rs 2.96 Billion: Police have arrested 11 Indian nationals involved in online gambling and cryptocurrency transactions worth over Rs 2.96 billion. The arrests were made in Deula Tol, Budhanilkantha Municipality, on Chaitra 12. The group was operating online betting activities and trading digital currencies, with over Rs 96 million in cryptocurrency dealings. Police seized mobile phones, laptops, notebooks, and bank documents from the suspects. The arrested individuals are from Rajasthan, India, and are currently under investigation, with the Kathmandu District Court extending their custody for further inquiry.

Kulman Ghising Files Writ Petition Against Removal as NEA MD: Kulman Ghising has filed a writ petition at the Supreme Court challenging the government’s decision to remove him from his position as Managing Director of the Nepal Electricity Authority (NEA). The petition, filed by his representative Advocate Lokmani Pokharel, seeks a stay order on the government’s decision and requests that Ghising be allowed to continue in his role. The petition names the Office of the Prime Minister, the Council of Ministers, and the Ministry of Energy as defendants. This comes after Ghising was replaced by Hitendra Dev Shakya, who has already assumed the role of MD.

Nabil Bank Accepts CEO Gyanendra Dhungana’s Resignation, Appoints Acting CEO: Nabil Bank’s Board of Directors has accepted the resignation of CEO Gyanendra Prasad Dhungana during its 677th board meeting on Chaitra 13, 2081. Dhungana’s resignation is effective from Chaitra 10, 2081. The board has appointed Senior Deputy CEO Manoj Kumar Gyawali as the Acting CEO to oversee the bank’s operations going forward.

Gold and Silver Prices Rise After Four-Day Decline: After four consecutive days of decline, gold prices increased by Rs. 200 today, reaching Rs. 173,500 per tola, according to the Nepal Gold and Silver Dealers Federation. This follows a Rs. 200 drop yesterday and a Rs. 600 decline on Monday. Silver prices have also risen, climbing by Rs. 10 per tola to Rs. 1,990. The fluctuation in precious metal prices reflects ongoing market volatility.