KATHMANDU: Stay informed with Nepal News’ Evening Economic Briefing. Delivered daily, this concise economic update gives you an essential overview of Nepal’s economic landscape, including key financial updates, market trends, and major economic events. Whether you’re tracking market shifts or exploring key economic indicators, this one-page summary offers clear, timely insights to help you stay ahead of the curve. With a focus on accuracy and relevance, the Evening Economic Brief is your go-to source for navigating the Nepal’s economy. Today, February 26, Nepal celebrates Maha Shivaratri, a government holiday. As a result, the share market, corporate houses, and most market activities are not functioning. Here are some key economic updates for this evening:

Nepal’s Major Life Insurers Record Double-Digit Growth in New Business: Nepal’s life insurance sector saw a 14.4% growth in new business, generating NPR 184.3 billion ($1.38 billion) in the first seven months of fiscal year 2081/82. Nepal Life led with a 24.8% increase, while Prabhu Mahalaxmi Life saw the highest growth rate of 53.69%.

Nepal Issues NPR 3.5 Billion in Savings Bonds to Raise Public Debt: Nepal’s Public Debt Management Office (PDMO) has issued NPR 3.5 billion in savings bonds to raise public debt. The Citizen Savings Bond 2086 offers a 7% interest rate, while the Foreign Employment Savings Bond 2086 offers 8.5%. The bonds are available for purchase from February 27 to March 28.

Nepal, World Bank, and India Near Final Agreement on Upper Arun Hydropower Project: The Nepal government is nearing an agreement with the World Bank and India to proceed with the Upper Arun Hydropower Project, with a capacity of 1,063 MW. Changes to the project’s land demarcation have been made to address Indian concerns. The World Bank, along with India, is preparing to invest $2 billion, but the final deal hinges on a solution that satisfies both parties. The Energy Ministry has stepped in after the Nepal Electricity Authority’s previous actions caused friction with the World Bank.

Four Commercial Banks Barred from NRB’s Investment Facility: Kumari Bank, Nepal Investment Mega Bank, Laxmi Sunrise Bank, and Prabhu Bank have been barred from accessing Nepal Rastra Bank’s investment facility after their non-performing loan (NPL) ratios exceeded 5%. Kumari Bank recorded 6.96%, Nepal Investment Mega Bank 5.86%, Laxmi Sunrise Bank 5.67%, and Siddhartha Bank 5.06% NPL.

Company Registrar to Implement Amended Company Act, 2063, Simplifying Deregistration: The Office of the Company Registrar will enforce Section 136(a) of the amended Company Act, 2063 by March, facilitating the update of records for over 50% of inactive companies. A new system, CANMIS, will streamline company deregistration and updates, reduce penalties, and enhance compliance processes for registered entities.

100 Students Secure Spots in Final Round of Nepal Economics Olympiad 2025: The sixth edition of the Nepal Economics Olympiad 2025 will be held from February 28 to March 2, 2025, in Kathmandu. A total of 1,724 students applied, with 100 finalists emerging from regional selections across 185 schools and colleges. The students will demonstrate their expertise in economics, financial literacy, and business thinking. The top five will represent Nepal at the International Economics Olympiad in Baku, Azerbaijan, in July, while five others will compete in the Australian Economics Olympiad.

Nepal’s Central Bank Allows Inter-Bank Trade of Agriculture and Energy Loans: Nepal Rastra Bank has introduced provisions allowing banks to buy and sell agriculture and energy sector loans between financial institutions. The new directive requires actual fund transfers and mandates the purchasing institution to record the transaction. Only the purchaser can include the loan in its portfolio.

Luxury Imports Drive Surge in Customs Revenue: Nepal’s customs revenue rose as demand for high-tax luxury items increased. In seven months, Rs 111.9 billion was collected from 10 key imports, including petroleum products, vehicles, and mobile phones. Motorcycle imports saw the highest growth, with revenue from unassembled units soaring 93 percent. High-cc vehicles also boosted revenue.

Upper Sankhuwa Khola Hydropower Project Secures NPR 6.18 Billion Investment: Led by Agriculture Development Bank, the 40 MW Upper Sankhuwa Khola Hydropower Project has secured NPR 6.18 billion in funding. Targeted for completion by mid-2085 BS, the project involves domestic and non-resident Nepali investors. It is expected to generate 244 GWh of electricity annually, contributing significantly to Nepal’s energy sector.

Bandiipur’s 5-Star Hotel and Cable Car Project Near Completion: Bandiipur’s 5-star hotel, “Queen Tower,” is in its final stages, set to open in May. Located in Bandiipur-4, the hotel offers breathtaking views of the Himalayas, including Machapuchhre and Langtang. The project, with an investment of NPR 6.29 billion, includes adventure sports and a cable car, boosting tourism.

Sujal Dairy Sees Significant Growth in 2024: Sujal Dairy has experienced remarkable business growth, reaching NPR 2.33 billion in 2024, up from NPR 1.86 billion in 2023. Founded in 2005, the company, led by Laxmi Group, produces a range of dairy products. Its profit margin has increased to 5.6%, with an improved financial rating.

Insurance Companies Required to Maintain Risk-Based Capital: Under the newly issued Insurance Regulations, 2081, insurance companies must maintain capital based on the risks they accept, in addition to the minimum paid-up capital set by the Insurance Authority. The regulations also allow the establishment of an Insurance Information Center and a fraud investigation committee.

10 Insurance Companies Declare Dividends for FY 2080/81: In the fiscal year 2080/81, 10 insurance companies have announced dividends for their shareholders. These include IME Life Insurance, Surya Jyoti Life Insurance, Nepal Life Insurance, Shikhar Insurance, Himalayan Everest Insurance, IGI Prudential Insurance, Siddhartha Premier Insurance, Sanima Reliance Life Insurance, Citizen Life Insurance, and Sanima GIC Insurance. These companies have declared various percentages of cash and bonus shares as dividends.

Corporate Club Nepal Honors Excellence with 22 Awards: Corporate Club Nepal Pvt. Ltd. honored achievements in 22 categories at the fourth edition of the Corporate Excellence Awards 2024. Key winners included Karna Shakya (Lifetime Achievement), Jeeva Lamichhane and Upasana Poudel (Leadership), and institutions like Nepathya and Kalika Manav Gyan School for outstanding contributions.

Majhi Community in Banke Struggles as Gold Panning Declines: The Majhi community of Banke, traditionally dependent on gold panning in the Rapti River, faces a crisis as water levels decline, making the profession increasingly difficult. With the diminishing gold content, many have turned to alternative livelihoods like vegetable farming, but sustainable options remain scarce.

Declining Revenues Threaten Telecom Sector’s Future and Infrastructure Investment in Nepal: Telecom companies in Nepal, including Nepal Telecom and NCELL, are facing a decline in revenue, severely affecting their capital expenditure for infrastructure development. Previously, these companies allocated nearly half of their revenue to infrastructure, but now this spending has dwindled to around 10 percent. In the fiscal year 2073/74, the two telecom companies earned Rs 97.3 billion, with a slight increase to Rs 98.71 billion in 2074/75. However, revenue has steadily declined since then, dropping by about 26 percent in the fiscal year 2079/80 to Rs 73.14 billion. To maintain operations, the sector requires an annual capital expenditure of Rs 6 billion, but due to falling revenue and profits, telecom companies have reduced this investment. The telecom sector’s contribution to Nepal’s economy, which was 3.9 percent in 2016, has since decreased to 1.8 percent by 2023. This drop reflects a significant decline from 3.4 percent in 2017, 3 percent in 2018, and further down to 1.9 percent in 2022. The period from 2008 to 2016 was marked by rapid growth in telecom capital expenditure, but the situation has worsened since 2017. Experts warn that without regulatory changes and increased investments, the future of the telecom sector and its contribution to the national economy remains uncertain.

Delay in Operation of Basic Hospitals in Kaski and Baglung Raises Concerns: In Kaski’s Annapurna Rural Municipality, a 15-bed hospital building, completed a year ago, remains unoperational due to a shortage of staff and equipment. Similarly, Baglung’s Badigad Municipality’s hospital is awaiting operationalization despite Rs. 18 crore investment. Both municipalities emphasize the need for inter-government cooperation to ensure effective operation.

Nepal Rastra Bank Requires Police Report for Appointment of Payment Service Agents: Nepal Rastra Bank has amended its Unified Payment System Directive 2080, mandating that payment service providers (wallets) submit police reports when appointing official agents. The new rule, effective by Sunday, has caused concerns among small business owners, who find obtaining police reports a complex and risky process.

Prabhu Smart Fund Achieves Over NPR 17 Crore Profit by End of Magh: Prabhu Smart Fund earned more than NPR 17.54 crore in profit by the end of Magh, surpassing its previous profit of NPR 13.4 crore by the end of Poush. The fund’s total income by Magh reached NPR 18.9 crore, with expenses of over NPR 1.36 crore, reflecting a positive profit impact due to higher earnings in Magh. The per unit value of the fund increased to NPR 12.43 from NPR 12.01. The fund had invested over NPR 99.55 crore in securities, with a market value exceeding NPR 108 crore.