KATHMANDU: Nepal News presents today’s snapshot of Nepal’s economic activities. Get quick updates on major market movements, policy shifts, and financial developments shaping the economy of Nepal. Here are the key economic highlights for today:

NRB Role Questioned as CIB Detains Prabhu Bank CEO and Executives

The role of the Nepal Rastra Bank (NRB) is being questioned after the Central Investigation Bureau (CIB) bypassed the banking regulator to arrest and detain the CEO, Ashok Sherchan, and other top executives of Prabhu Bank for nearly two weeks. The arrests, starting on November 30 and continuing with the arrest of the Head of Remittance on Wednesday, relate to a dispute over a loan transaction involving the bank’s former chairman, Devi Prakash Bhattchan, and Prabhu Management. The CIB acted without the NRB’s formal recommendation, unlike previous banking crime cases. High-ranking NRB officials expressed concern over the CIB’s unilateral action, warning that it could have triggered a ‘bank run’ and that the NRB’s silence is making the financial sector uneasy.

Petroleum Pipeline Moves to 2nd Phase, Saving Up to Rs 5-6 Billion

The second phase of the petroleum pipeline expansion, a joint project between the Nepal Oil Corporation (NOC) and Indian Oil Corporation (IOC), is underway, with IOC having already called for tenders for the Jhapa-Siliguri section. The overall project, including the Amlekhgunj-Lothar pipeline, the Jhapa (Charali) depot, and the Siliguri-Charali pipeline, will be constructed with IOC’s technical and financial support, estimated to cost Rs 15 billion. NOC Executive Director Dr. Chandika Bhatta noted that this project, alongside a proposed LPG pipeline, is expected to save Rs 5 to 6 billion annually in transportation costs. Separately, NOC is investing Rs 9 billion to build a 100,000-kiloliter storage terminal in Lothar, Chitwan.

Over 40,000 Cubic Feet of Timber Rotting in Bara

Over 40,000 cubic feet of timber harvested last year in three partnership forests in Bara district, including Gadimai, Tamagadhi, and Halkhoriya, are currently rotting in the storage yards due to delays in management plan approval from the Forest Office. Specifically, Gadimai Partnership Forest has 28,896 cubic feet from last year and 6,444 cubic feet of Sal wood from the fiscal year 2023/24 rotting. Officials estimate that roughly 10,000 cubic feet of Sal wood cut between 2015 and 2020 has already turned to soil. Consumers, who pay up to Rs 2,010 per cubic foot for A-grade Sal wood, are frustrated, with one ward chairman claiming he has been seeking timber for his house construction for over a year.

Narayangarh-Butwal Road: 33 Bridges Completed on Rs 16.995 Billion Project

The eastern section of the Narayangarh-Butwal Road Expansion Project has completed the construction of 33 out of 34 planned bridges. According to Shiva Khanal, information officer for the project, the remaining bridge on the Arunkhola is in the final stages of completion. The project involves expanding the 113-kilometer road, which started on December 10, 2018. Despite the original completion date of August 7, 2022, being missed three times, the project’s physical progress has reached 76%. The total cost of the expansion, funded by an Asian Development Bank (ADB) loan, is Rs 16.995 billion.

Contract Employees to Receive Full Allowance After Supreme Court Ruling

The Office of the Prime Minister and Council of Ministers has instructed the Ministry of Federal Affairs and General Administration to implement a recent Supreme Court ruling that mandates contract employees receive the same dearness allowance as permanent staff. This decision ensures that contract employees, who were previously excluded, will now receive the current monthly allowance of Rs 5,000, effective from the first month of the current fiscal year 2025/26. The order was issued following a verdict by the Supreme Court’s double bench on November 24, which acted on a writ petition filed by a member of the Nepal Government Employees’ Organization.

Cabinet Approves Gen Z Agreement; Report Cites Rs 84.457 Billion in Damages

The Cabinet, meeting on Thursday at the Office of the Prime Minister and Council of Ministers, approved the 10-point agreement reached between the Prime Minister and representatives of the Gen Z protest on Wednesday. Minister for Communication and Information Technology Jagadish Kharel stated that the agreement, which expands the jurisdiction of the Judicial Inquiry Commission, will be published in the Gazette and implemented with high priority. Separately, a committee formed to assess damages from the September 8 and 9 Gen Z protests submitted its report, estimating total physical damage across 54 districts and 262 local units at Rs 84.457 billion. The report noted that 77 people lost their lives, and 2,429 were injured during the movement.

NRB Drafts AI Guidelines for Financial Institutions to Ensure Ethical Use

The Nepal Rastra Bank (NRB) has prepared a draft of the Artificial Intelligence (AI) Guideline to regulate the responsible, transparent, and ethical use of AI in financial institutions. The guidelines apply to all licensed entities, including Class A, B, C, and D banks, the Nepal Infrastructure Bank Limited, and all Payment System Operators (PSOs) and Payment Service Providers (PSPs). The draft emphasizes that the Board of Directors and senior management will be ultimately accountable for the outcomes generated by AI systems, moving responsibility beyond just the IT department. It mandates institutions to adopt ethical practices, conduct risk-based assessments before deploying AI, and ensure customers are informed when AI is used in decision-making processes.

Rs 12 Deficit: Jumla Apple Farmers Protest Low Insurance Payout

Apple farmers in Jumla are protesting after the compensation received for drought and hailstorm damage was less than the premium paid for their insurance policies. Farmers who paid a premium of Rs 36 per plant to Shikhar Insurance are only receiving Rs 24 per plant in compensation, resulting in a deficit of Rs 12 per plant. Last year, 5,350 farmers insured 1.2 million apple saplings, hoping for relief from the Rs 400 million to Rs 500 million worth of annual apple exports that are increasingly threatened by climate change. Padam Bahadur Dangi, coordinator of the Apple Insurance Victims Action Committee, stated that the farmers are struggling to even recover the money they paid due to a backlog of over Rs 320 million in government subsidy payments to the insurance authority.

ADBL and KOICA Partner to Offer Concessional Loans to Innovative Korean Returnees

The Agricultural Development Bank Limited (ADBL) and the Korea International Cooperation Agency (KOICA) have signed an agreement to provide concessional loans to Nepali youth who have returned from Korea and started innovative businesses. This financial assistance is a key component of the “Strengthening Gradual Support System for Reintegration (K-We)” project, specifically targeting the Returnee Innovators for Nepal (RIN) program. The loans will be based on the business concept and investment of the youth, aiming to enhance their entrepreneurial capabilities. The RIN program officially began in 2024 and will run for approximately five years until 2028, annually providing business training, consultancy, and startup loans to 50 Nepali returnee and overseas workers.

Gandaki Province Claims Over Rs 5 Billion in Damages from Gen Z Protest

Gandaki Province sustained over Rs 5 billion in damages during the Gen Z protest, ranking third among the seven provinces for reported losses. According to the Nepal Insurance Authority, Gandaki Province, at least 222 insurance claims were filed, amounting to Rs 1.653 billion in claimed compensation. However, as of December 3, the authority has only paid Rs 305.7 million in claims. The provincial government estimated the damage to private property to be over Rs 3 billion and government property to be over Rs 2 billion. Across all provinces, property insurance had the highest claims, totalling Rs 19 billion.

Health Insurance Program Faces Rs 14 Billion Payment Shortfall

The national health insurance program is facing a severe financial challenge, with outstanding payments to hospitals reaching Rs 14 billion, while annual premium collections are only Rs 3.75 billion. The Health Insurance Board informed that the annual Rs 10 billion deficit makes the program unsustainable, highlighting its financial dependency. Despite this, the number of beneficiaries utilizing the service is high, with 12.5 million hospital visits recorded in the previous fiscal year, averaging five visits per person. Executive Director Raghu Raj Kafle noted that efforts are underway to expand coverage, amend the Health Insurance Act, 2017, and improve service quality.

Huaxin Cement Substation, Built for Rs 1.5 Billion, Aids Dhading’s Power Quality

The Huaxin Narayani Cement Industry, a Chinese-funded venture in Malekhu, Dhading, has invested Rs 1.5 billion to construct a 132 kV substation, significantly improving electricity supply in the district. Although the substation was built by the industry itself with the expectation of later reimbursement from the government, it has addressed the long-standing complaints of power outages and low voltage in Dhading and surrounding areas. The substation ensures smooth electricity flow to the district’s 66,180 customers and facilitates the integration of smaller hydropower projects. Deputy General Manager Dilliraj Pokharel confirmed that the facility has yielded great returns for the Nepal Electricity Authority (NEA) by strengthening the entire district’s distribution system.

Baglung Festival Aims for Rs 100 Million in Economic Transactions

The 8th Baglung Festival, organized by the Baglung Chamber of Commerce and Industry, is being held from December 26 to January 5, 2026, to boost local trade and attract domestic tourists. The event, held at the Banghechaur Playground this year, aims to achieve over Rs 100 million in economic transactions and draw between 800,000 and 1 million visitors. Under the theme “Tourism, Agriculture, Art, Culture, Industry, and Trade: The Foundation for Prosperous Baglung,” the festival has several social objectives, including donating Rs 10 from each ticket sale to the human service ashram for a “Street Human-Free Nepal” campaign and allocating Rs 500,000 to the Chamber’s member welfare fund. Activities include cultural performances, a ‘Made in Baglung’ exhibition, and tourism promotion.

Sugarcane Mills to Start Crushing Before New Year

Most sugar mills are preparing to start crushing sugarcane a week or two before 2026 New Year’s Day, following the government’s decision on the price of sugarcane. The Cabinet recently fixed the price at Rs 620 per quintal, with Rs 70 provided as a government subsidy and Rs 550 paid by the mill owners. Indushankar Sugar Mill and Mahalakshmi Sugar Mill in Sarlahi have completed initial preparations. Mahalakshmi aims to crush 2 million to 2.2 million quintals this year, up from 1.3 million last year. Annapurna Sugar Mill, Dhankoul, is scheduled to start crushing a few days later, after facing recent protests from farmers demanding payment of old arrears.

Egg Production Cost Climbs to Rs 19.12 Per Piece

The cost price of an egg has risen to Rs 19.12 per piece, according to a report by experts from the Agriculture and Forestry University (AFU) for the Poultry Entrepreneurs Forum. This is a significant increase from the previous cost price of Rs 16.56 determined three years ago. The calculation was based on raising 10,000 layer chickens until 80 weeks of age, with the total cost of production and market delivery estimated at Rs 49.8 million. Key expenses included feed, costing Rs 34.8 million, and labor, electricity, and maintenance, costing Rs 6 million. The committee’s findings will be sent to the Ministry of Agriculture for approval.

NEPSE Drops by 23.8 Points This Week; Market Capitalization Falls by Rs 30 Billion

The Nepal Stock Exchange (NEPSE) index dropped by 23.8 points this week, with the market declining over four of the five trading days. This decrease resulted in a reduction of market capitalization by Rs 30 billion. Trading volume also decreased, limited to Rs 20.77 billion this week, compared to Rs 21.26 billion in the previous four-day trading period. While the manufacturing sector gained 2.39% and life insurance gained 0.69%, the finance sector saw the highest loss at 2.56%. Analysts suggest that despite favorable policies like the relaxed banking lending limits, the market remains volatile due to the combination of economic conditions and political uncertainty.

Reliance Spinning Mills Mutual Fund IPO Oversubscribed 18 Times

The Initial Public Offering (IPO) of Reliance Spinning Mills for mutual funds has been oversubscribed by 18 times the demand. The company had allocated 57,798 units (5% of the total public issue of 1,155,960 units) for mutual funds. While 45 mutual fund schemes applied for the shares, only 41 were allotted. The applications amounted to Rs 759 million, far exceeding the required Rs 47.4 million, leading to a refund of Rs 711.6 million. The cut-off price for institutional investors was determined to be Rs 912, setting the public issue price at Rs 820.80 per share.

Shivam Cement Approves 10% Cash and 2.50% Bonus Share Dividend

Shivam Cement has successfully passed its dividend proposal at its 10th Annual General Meeting. The company approved a 10% cash dividend and a 2.50% bonus share distribution. Following the issuance of the bonus shares, the company’s issued and paid-up capital will increase to Rs 5.59 billion. The Annual General Meeting also confirmed the appointment of an auditor for the fiscal year 2025/26.

Siddharth Premier Insurance Proposes 25% Cash Dividend Despite Quarterly Loss

Siddharth Premier Insurance has proposed a 25% cash dividend to its shareholders, as decided in a board of directors meeting held on Thursday evening. The proposal is currently subject to approval from the Insurance Authority and the company’s General Assembly. This year’s proposal is lower than the 30% cash dividend the company provided previously. The company’s stock is currently trading at Rs 714 per share. Despite the dividend proposal, the company reported a net loss of approximately Rs 300 million in the first quarter of the current fiscal year 2025/26.

Gold Price Jumps by Rs 3,500 on Friday

The price of gold and silver saw a sharp increase on Friday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold per tola (11.66 grams) was set at Rs 256,600, marking a jump of Rs 3,500 from the previous day. Silver’s price was determined to be Rs 3,905 per tola, an increase of Rs 100. In the international market, one ounce of gold was trading at USD 4,275 and silver at USD 62 on Friday.