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.

Nepal Stock Market Sees Modest Recovery; Hydropower, Finance, and Tourism Sectors Lead Gains:
The Nepal Stock Exchange (NEPSE) index rose by 0.55% this week, gaining 14.42 points to close at 2,655.38. Market turnover surged by 38.87%, with an average daily transaction of Rs. 10.08 billion. Hydropower led sub-indices with a 5.51% gain, followed by finance (4.33%) and tourism (2.21%). Of 13 sectors, 6 rose while 7 declined. The trade sub-index dropped the most (1.63%), while life insurance and production also fell. Market capitalization increased by Rs. 24 billion to Rs. 4.423 trillion. Investor confidence remains cautious, with mixed sectoral performance, but rising retail activity and volume signal potential for momentum next week.

Record Remittance Inflow Adds Rs. 700 Billion Liquidity to Nepal’s Banking System:
A surge in remittance inflows has led to excess liquidity in Nepal’s banking system, with liquidity swelling to around Rs. 700 billion, as per the Credit-to-Deposit (CD) ratio. In Baisakh alone, Nepal received a record Rs. 165 billion in remittances—the highest ever in a single month. In the first 10 months of the fiscal year, total remittance inflow reached Rs. 1.356 trillion. Bankers say this has boosted liquidity, with banks depositing around Rs. 400 billion at Nepal Rastra Bank at a 3% interest rate. NRB has absorbed Rs. 255 billion via deposit collection tools and Rs. 138 billion through the SDF facility.

Nepal’s Economy Heavily Reliant on Remittances—Inbound Inflows Surge, Outbound Remittances Also Rise Sharply:
Remittance remains the backbone of Nepal’s economy amid weak industrial growth and limited exports. Over 13.56 trillion rupees in remittances entered Nepal in the first 10 months of FY 2081/82, a 13% rise from the previous year. This income fuels household spending, education, healthcare, and savings across the country. However, Nepal is now also sending more remittances abroad. In the same period, Rs. 8.46 billion—over USD 61.9 million—was sent out by foreign workers in Nepal, marking a 54.5% rise year-on-year. Foreign laborers mainly work in hydropower, construction, and IT projects, and are allowed to remit up to 75% of their earnings.

Most Banks Keep Fixed Deposit Interest Rates Unchanged for Asar, Few Reduce:
Commercial banks have announced interest rates for the month of Asar, with 14 out of 19 keeping their maximum fixed deposit rates unchanged, while 5 have lowered them. Kumari, Prabhu, Everest, NMB, and NIC Asia banks reduced their rates slightly, with Kumari Bank offering the lowest at 5.71%. The remaining banks, including Rastriya Banijya, Nabil, Siddhartha, and Standard Chartered, maintained their previous rates. Among national-level development banks, six kept rates steady, one reduced, and one increased. Despite minor reductions, most banks continue offering fixed deposit interest rates between 5.5% and 6.6%, reflecting continued cautious liquidity management and declining deposit pressure.

Commercial Banks’ Profits Shrink Amid Rising Loan Losses:
Commercial banks in Nepal have seen a decline in profits during the first 10 months of the current fiscal year, with average profit down by 1.67%. The drop is attributed to increased non-performing loans and rising loan loss provisions. By the end of Baisakh, banks recorded a total profit of Rs. 47.79 billion, slightly lower than Rs. 48.60 billion during the same period last year. Ten banks saw profit declines, while ten others reported gains. NIC Asia Bank’s profit fell the most—by 77.87%, while Nepal Bank saw a 457.12% surge. Despite reduced loan loss provisions, profitability remains under pressure.

NRB Forms Task Force for Banking Sector Reforms, Led by Dr. Rewat Bahadur Karki:
Nepal Rastra Bank has formed a three-member task force, led by Dr. Rewat Bahadur Karki, to recommend comprehensive reforms in the banking sector. Former banker Bhuvan Dahal and NRB Executive Director Guru Prasad Paudel serve as members. The task force has one month to submit recommendations on six key areas, including liberal yet risk-aware banking regulations, effective supervision, customer-friendly services, enhanced rural credit flow, challenges from bank mergers, money laundering compliance, and NRB’s role in capital market development. Governor Dr. Biswo Nath Poudel formally handed over the mandate, signaling urgency for reforms amid ongoing financial system challenges.

Fertiliser Crisis Hits Kavrepalanchok Farmers Again Amid High Demand, Low Supply:
Kavrepalanchok farmers are facing a severe shortage of chemical fertilisers, especially urea, during this plantation season. The Agricultural Inputs Company Limited (AICL) and Salt Trading Corporation (STC) have failed to meet demand, forcing farmers to buy fertilisers from middlemen at inflated prices—up to Rs. 2,500 per sack compared to the subsidised rate of Rs. 1,000. Despite being Nepal’s top fertiliser-consuming district, Kavrepalanchok receives only 17.5% of the provincial allocation. AICL officials say 1,500 tonnes of urea are urgently needed for Kavre and Sindhupalchok. Authorities hope to receive the remaining quota by June-end and plan for 19,500 tonnes next fiscal year.

New NRB Governor Vows Stronger, Inclusive and Transparent Banking Sector:
Newly appointed Nepal Rastra Bank Governor Bishwanath Paudel has pledged to strengthen Nepal’s banking sector, making it more inclusive, stable, and transparent. Speaking at a welcome and farewell event organized by the Nepal Bankers’ Association, Paudel said existing NRB policies are effective and will largely continue, with reforms only if necessary. He emphasized policy coordination with banks to ensure long-term sectoral development. Outgoing Governor Maha Prasad Adhikari reflected on steering the sector through COVID-19 challenges and stressed the need for continuous vigilance and learning. He expressed readiness to support the banking sector in the future through his experience and guidance.

Finance Minister Paudel Calls for Unity in Pollution Control and Environment Conservation:
Deputy Prime Minister and Finance Minister Bishnu Prasad Paudel has emphasized the importance of environmental conservation and pollution control, urging collective efforts from all sectors. Speaking at an EV Rally organized by Annapurna Media Network in Kathmandu, he highlighted the government’s commitment to formulating policies addressing climate change and promoting green development. Minister Paudel stressed Nepal’s dual priorities: infrastructure growth and environmental protection. He expressed pride in the Sagarmatha Samaad as a platform for global climate advocacy. Annapurna Media Chairman Rameshwor Thapa added that the organization is actively engaged in raising awareness and driving real environmental change.

Share Mortgage Loans Surge to Rs 1.25 Trillion in Nepal, But Stock Market Stays Sluggish:
Margin-type share mortgage loans issued by banks and financial institutions in Nepal have surged to Rs 1.25 trillion by the end of Baisakh 2082, up Rs 35 billion from Rs 900 billion a year earlier. Commercial banks account for the largest portion—Rs 1.03 trillion. Despite rising loans, Nepal’s stock market (NEPSE) remains stagnant around 2,600 points. Loan categories over Rs 10 million saw the highest growth, increasing by over 53%. While credit flow has increased, the market response has lagged. Experts attribute the stagnation to investor uncertainty, political noise, IPO dilution, and pre-budget speculation, expecting a revival post-Asar.

Govt Move to Scrap In-House Employee Funds Triggers Panic in 7 Commercial Banks:
The government’s new budget and Finance Bill 2082 mandate that by the end of Asar 2083, all in-house employee funds operated by banks must be transferred to state-approved institutions like the Citizen Investment Trust, Social Security Fund, or Employees Provident Fund. This directive, under Clause 398 of the budget and Clause 23 of the Finance Bill, has created turmoil in seven commercial banks—including Nepal Bank, Rastriya Banijya Bank, ADBL, Global IME, Nabil, Nepal Investment Mega, and Everest Bank—who collectively manage nearly Rs 100 billion in such funds. Some employees nearing retirement have begun resigning to safeguard their accumulated savings.

Commercial Banks Dominate as Financial Sector Posts Rs 53 Billion Profit by Baisakh-End FY 2081/82:
As of the end of Baisakh in FY 2081/82, banks and financial institutions in Nepal earned a net profit of Rs 53.09 billion, according to Nepal Rastra Bank. Commercial banks contributed over 90% of the total, generating Rs 47.79 billion in profit through interest income, service fees, and financial transactions. Development banks earned Rs 4.59 billion, while finance companies lagged behind with only Rs 690 million. Analysts note that weak performance by non-bank financial institutions raises concerns over balance in the financial system. Factors like interest rate volatility, delayed investments, and regulatory pressures may dampen profitability in coming months.

Main Structure of Gwarko Flyover Completed; Public Transport to Operate Soon:
The main structure of the Gwarko Flyover in Lalitpur has been completed. Minister for Physical Infrastructure and Transport, Devendra Dahal, along with senior officials from the Department of Roads, inspected the site on Saturday. Minister Dahal stated that the flyover faced some delays as it was a new kind of infrastructure project. Director General Dr. Bijaya Jaisi confirmed that public transport will begin using the flyover within a few days. Some minor tasks, including installation of the center divider, remain. Once operational, the flyover is expected to ease traffic congestion in the Koteshwor and Gwarko areas significantly.

Four Industries Shut Down in Mandandeupur for Unpaid Taxes:
Four industries in Mandandeupur Municipality, Kavrepalanchowk, have been shut down for failing to pay taxes and renew registrations. A team led by Mayor Tok Bahadur Waiba padlocked three brick industries—Kalidevi, Dakshinkali, and Chandeni-Nagarkot—and one crusher industry. The Washing and Crushing Industry at Mandandeupur-9 owes Rs 4.58 million since FY 2078/79, while Kalidevi Bricks has Rs 6.1 million in dues. Dakshinkali Bricks also owes Rs 4.58 million. Chandeni-Nagarkot Bricks was closed due to non-renewal. Mayor Waiba stated the closures followed repeated warnings and added the industries can reopen if dues are cleared and proper procedures are followed.