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 Allows Banks to Count Interest Collected Within 15 Days

Nepal Rastra Bank (NRB) has amended the Unified Directives 2026, allowing banks and financial institutions to count interest received within 15 days after the end of the fiscal year as income. Under the revised provision, only interest that remains unrealized after the 15-day grace period must be transferred to the regulatory fund after required statutory deductions. The amount can be moved back to retained earnings once the interest is collected.

Govt. Implements Revised Income Tax Threshold Under Income Tax Act 2002

The Ministry of Finance announced the enforcement of revised personal income tax structures under the Economic Act, 2026, effective from tomorrow, July 17. The minimum untaxed income threshold for individuals will increase from Rs 500,000 to Rs 1 million, subjecting annual income up to Rs 1 million to a basic 1 percent social security tax under the Income Tax Act, 2002. The maximum individual income tax rate decreases from 39 percent to 29 percent. Income between Rs 1 million and Rs 1.5 million will attract a 10 percent tax rate, while earnings exceeding Rs 4 million will face an additional 2 percent tax.

Civil Servants Receive 21% Salary Hike Starting Tomorrow

The Ministry of Finance will implement a 21 percent cumulative salary hike for public sector employees starting tomorrow, July 17, as outlined in the budget for fiscal year 2026/27. The adjustment incorporates a 10 percent increase in basic pay alongside a 10 percent performance-based monthly incentive allowance. Under the new scale, the basic monthly salary of the Chief Secretary rises from Rs 77,211 to Rs 84,932, totaling Rs 98,425 with allowances. The basic pay for office assistants increases from Rs 27,611 to Rs 30,372. The pay revision extends proportionately to the Police, Armed Police Force, and public school teachers.

NEPSE Rises by 7.50 Points with Rs 4.562 Billion Turnover

The Nepal Stock Exchange (NEPSE) index increased by 7.50 points to close at 2,597.80 points on Thursday. The index fluctuated throughout the session before finishing 0.28 percent higher than the previous trading day. The Sensitive Index also gained 2.92 points to reach 456.86 points. A total of 9,469,099 shares from 371 companies were traded across 39,595 transactions, generating a total turnover of Rs 4.562 billion. Out of the 13 traded sub-indices, nine groups closed in the green, led by gains in mutual funds and microfinance, while four sectors witnessed declines.

Commercial Banks Slash Deposit Interest Rates for July 17 to August 16

Commercial banks further reduced deposit interest rates for the upcoming July 17 to August 16, 2026 period due to low loan demand and massive excess liquidity. Throughout the fiscal year 2025/26, deposits surged by approximately Rs 1,000 billion, while credit expanded by only Rs 400 billion, forcing lenders to park over Rs 1,320 billion in excess funds with Nepal Rastra Bank. To lower fund costs, six major banks including NMB, Kumari, Standard Chartered, Citizens, Global IME, and Rastriya Banijya Bank slashed rates. The average maximum individual fixed deposit rate dropped from 4.26 percent to 4.17 percent.

NRB Revises Loan-to-Value Ratio Up To 80% for Large EVs

Nepal Rastra Bank (NRB) amended the Unified Directives 2026 to facilitate easier credit access for public transportation infrastructure. Under the newly implemented financial regulations, NRB increased the credit ceiling by raising the loan-to-value ratio for large electric passenger vehicles utilized in public transport. Commercial banks and financial institutions are now permitted to issue credit up to 80 percent of the total vehicle value, marking a substantial 20 percent increase from the previous regulatory cap of 60 percent. The policy change aims to incentivize clean energy transportation across the domestic financial market.

Rasuwagadhi Customs Collects Over Rs 15 Billion from Electric Vehicle Imports

Electric vehicle imports through the Rasuwagadhi customs point surged dramatically during the fiscal year 2025/26, driven by strong domestic demand. More than 6,500 Chinese electric cars, jeeps, vans, and minibuses entered via Kerung. This influx generated historic revenue for the Rasuwa Customs Office, bringing in over Rs 15 billion from electric vehicle duties alone, which accounted for more than 60 percent of the office’s total revenue. Despite minor tax adjustments, consumer demand remained high. However, after an illicit attempt to pre-clear 200 unarrived vehicles was uncovered, the Ministry of Finance suspended 13 employees, including the chief customs officer.

Customs Delays Cause More than Rs 13 Million Loss at Tribhuvan Airport

The Tribhuvan International Airport Customs Office faced export disruptions as cargo movements were completely suspended following jurisdictional interventions by security personnel. Export entrepreneurs reported that over 100 tons of custom-cleared goods remain stranded inside the warehouse, resulting in financial damages exceeding USD 100,000 or approximately Rs 13.3 million due to canceled cargo bookings and weather hazards. While exporters claim that security forces are unlawfully interfering with officially verified shipments, airport security representatives maintained that logistics operators failed to secure required warehouse passes and violated standard security procedures. Official coordination meetings held on Thursday concluded without reaching a resolution.

Cabinet Grants Approval for Minting New 1-Rupee and 2-Rupee Coins

The Ministry of Information and Communications announced that the executive cabinet approved the production of newly designed currency denominations during its latest official session. Under the new authorization, the government granted formal clearance to Nepal Rastra Bank to proceed with the minting and manufacturing of newly structured one-rupee and two-rupee coins. The decision empowers the alteration of the current visual designs and security features of the low-denomination coins to manage the physical currency circulation requirements within the domestic market effectively.

PM Balen Assures Government Support for Women Entrepreneurs

Prime Minister Balendra Shah (Balen) on Thursday reaffirmed the government’s commitment to supporting women entrepreneurs by removing administrative barriers and promoting locally manufactured goods at major tourist destinations. During a meeting with a Federation of Woman Entrepreneurs’ Associations of Nepal delegation led by President Darshana Shrestha, Prime Minister Balendra Shah (Balen) encouraged the organization to advance its “Ma Udhyami” (I am an Entrepreneur) brand. The federation urged the state to expand market access, prioritize women-owned businesses in public procurement, provide alternative collateral, and include them in policy-making processes.

Sudurpaschim Government Loses Majority Over Budget Disputes

The Sudurpaschim Province Assembly faced political instability as the ruling coalition collapsed following budget disputes between the Nepali Congress and CPN (UML). The chief minister dismissed four cabinet members representing the coalition partner after they refused to withdraw expenditure cut proposals on the upcoming budget for fiscal year 2026/27. Following the dismissals, CPN (UML) officially withdrew its support, leaving the government in a minority status with only 18 out of 29 required legislative votes. The political dispute risks bringing provincial administrative expenditures to a complete halt just one day prior to the constitutional deadline for budget approval.

Ministry of Industry Commences Asset Valuation for Butwal Yarn Factory

The Ministry of Industry, Commerce, and Supplies initiated a detailed due diligence audit of the Butwal Yarn Factory, which has remained non-operational for 19 years since its closure in 2008. Supported by the Asian Development Bank, the technical team evaluated the factory infrastructure, discovering that over 60 percent of the machinery requires complete replacement. Established in 1983, the public enterprise previously employed over 550 permanent workers. The valuation aligns with the fiscal year 2026/27 budget policy to revive sick public industries through public-private partnership operational models.

Govt. Imposes 5% VAT on Electricity and Ride-Sharing Services

The Ministry of Finance announced new revenue measures under the Economic Act, 2026, to enhance domestic taxation capabilities starting tomorrow, July 17. The Nepal Electricity Authority will levy a 5 percent Value Added Tax on domestic consumers exceeding 50 units of monthly consumption, while a 5 percent Value Added Tax will apply to digital ride-sharing operations. The policy adds a 3 percent equity fee on private education and health services, alongside a 2 percent luxury tax on five-star resorts. Concurrently, the annual casino royalty fee increases from Rs 15 million to Rs 30 million.

Govt. Implements 15th Amendment to Public Procurement Regulations

The government published the 15th amendment to the Public Procurement Regulations, 2007, in the Gazette to streamline delayed development projects. The Public Procurement Regulations, 2026, replace the former Rule 120, permitting final contract extensions for projects with at least 50 percent physical progress affected by budget shortages or compensation events during fiscal year 2025/26. Contractors must submit applications within 30 days without demanding extra financial compensation. Failure to complete tasks will result in the forfeiture of performance bonds and blacklisting under Section 63 of the Public Procurement Act, 2006.

India and Nepal Expand 400 kV Transmission Network and Electricity Trade Limits

Senior energy officials from India and Nepal concluded high-level talks on July 15 this year to expand electricity trade and upgrade infrastructure. Co-chaired by Indian Power Secretary Pankaj Agarwal and Nepali Energy Secretary Sarita Dawadi, the 13th Joint Steering Committee session endorsed boosting the Dhalkebar-Muzaffarpur 400 kV network capacity. The framework increases export limits to 1,650 MW and imports to 1,400 MW. Blueprints were approved for the Motihari-Nijgadh 400 kV line and the Chameliya-Jauljibi 220 kV line, slated for December 2028. The Gorakhpur-New Butwal 400 kV line will temporarily run at 220 kV between August 2026 and December 2027.

Tree Cutting Commences for Damauli-Bharatpur 220 kV Transmission Line

Tree felling has commenced in the Chitwan section for the construction of the Damauli-Bharatpur 220 kV transmission line under the Tanahun Hydropower Project. The project initiated the clearance after securing official permits on May 8 this year to cut at least 1,263 trees across community and national forests in Bharatpur Metropolitan City. The broader project, approved by the cabinet on December 5, 2022, allows for clearing 9,127 trees across both Chitwan and Tanahun districts. India’s KEC International company is executing the 35-kilometer transmission line package, which has currently achieved 81 percent overall physical progress.

Salt Trading Chitwan Branch Distributes Subsidized Fertilizers

The Salt Trading Corporation branch office in Chitwan distributed 35,838 bags of urea, 44,944 bags of DAP, and 4,943 bags of potash fertilizer across the district during the current fiscal year 2082/83. The office is currently selling 9,200 bags of urea and 1,000 bags of DAP, while maintaining a stock of 7,802 bags of urea, 2,866 bags of DAP, and 12,425 bags of potash. The price for a 50 kg bag is fixed at Rs 847 for urea, Rs 2,297 for DAP, and Rs 1,697 for potash. The enterprise aims to deploy the Farmer Management System software to digitize all transactions.

Krishi Samagri Company Bharatpur Distributes 969 Metric Tons of Fertilizer

The Krishi Samagri Company Bharatpur branch distributed 969.175 metric tons of subsidized chemical fertilizer via 278 listed cooperatives using an online tracking system within 15 days of the paddy cultivation season. The sales included 668.200 metric tons of urea, 201.800 metric tons of DAP, and 99.175 metric tons of potash. Bharatpur Metropolitan City recorded the highest consumption with 239.150 metric tons of urea, 197.050 metric tons of DAP, and 22.225 metric tons of potash. The office utilized its emergency buffer stock to supply 8.200 metric tons of urea and 4.050 metric tons of DAP to meet high demands.

Bhaktapur Transport Office Generates Over Rs 198 Million from Driving Licenses

The Transport Management Office, Bhaktapur, distributed 90,000 driving licenses over the past three months, generating more than Rs 198.2 million in revenue for the state treasury. According to the office, 238,000 driving licenses were printed during the period, of which 90,000 have been handed over to service seekers. The office is currently issuing between 1,000 and 1,800 driving licenses daily.

Govt. Allocates Rs 3.5 Billion for District Headquarters Project in Nawalparasi

The Ministry of Urban Development accelerated the construction of a comprehensive model district headquarters in Kawasoti Municipality-3, Nawalparasi (Bardaghat Susta Purba), spanning around 124.61 hectares of land. The intensive urban and building construction project involves two major commercial contracts worth Rs 270 million and Rs 3.5 billion respectively to construct 45 disabled-friendly public buildings. The initial phase achieves 50 percent physical completion for integrated offices designed to accommodate postal, revenue, and treasury operations. The master plan reserves 21.59 percent of the area for open spaces alongside integrated sports grounds and a 950-vehicle parking capacity.

NRB Raises Share Collateral Loan Limit Up to 80 Percent

Nepal Rastra Bank (NRB) has amended its unified directives to implement its monetary policy, allowing banks and financial institutions to increase the loan-to-value limit on shares used as collateral from 70 percent up to 80 percent. Under the new guidelines, financial institutions can offer this additional 10 percent leverage by designing specific product papers that assess the financial strength of listed companies. The NRB specified that these product papers must be published on the institutions’ websites and emphasized that once a loan is issued, the underlying shares cannot be revalued to demand further credit limits.

Salt Trading Corporation Chiwan Branch Distributes Subsidized Fertilizers

The Salt Trading Corporation branch office in Chitwan distributed 35,838 bags of urea, 44,944 bags of DAP, and 4,943 bags of potash fertilizer across the district during the current fiscal year 2026/27. The office is currently selling 9,200 bags of urea and 1,000 bags of DAP, while maintaining a stock of 7,802 bags of urea, 2,866 bags of DAP, and 12,425 bags of potash. The price for a 50 kg bag is fixed at Rs 847 for urea, Rs 2,297 for DAP, and Rs 1,697 for potash. The enterprise aims to deploy the Farmer Management System software to digitize all transactions.

Gold Traded at Rs 285,200; Silver at Rs 4,325

Gold prices saw an upward trend in the domestic market today, while silver prices registered a decline. According to the Federation of Nepal Gold and Silver Dealers’ Association, the price of gold increased by Rs 400 per tola (11.66 grams) today. The gold is currently trading at Rs 285,200 per tola. On Wednesday, gold was traded at Rs 284,800 per tola. Conversely, the price of silver has decreased.  The Federation reported a drop of Rs 90 per tola, bringing the price of silver down to Rs 4,325 per tola today. On Wednesday, silver was valued at Rs 4,415 per tola.