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The Supreme Court on Thursday annulled the appointment of Koshi Province Chief Minister Uddhav Thapa.

Hearing the case filed against the Koshi government, a full bench of Justices comprising Ishwor Prasad Khatiwada, Ananda Mohan Bhattarai and Til Prasad Shrestha directed province Chief Parshuram Khapung to take ahead the process to form a new government within seven days.

The apex court issued the order to form the government again as per Article 168 (2) of the Constitution of Nepal.

The CPN-UML on July 7 had filed a writ at the Supreme Court arguing that the new government was formed in the Koshi Province in an illegal way.

UML Chief Whip Rewati Raman Bhandari on behalf of UML Koshi Province Parliamentary Party leader and outgoing chief minister Hikmat Kumar Karki had filed the writ demanding a mandamus order.

Hearing the writ filed against Koshi Province Chief Minister Uddhav Thapa, a joint bench of Justices Sushmalata Mathema and Til Prasad Shrestha issued an order to send the writ to the full bench.

After a preliminary hearing, a single bench of Justice Sapana Malla Pradhan issued an interim order not to take a decision that would have long-term effects on the Koshi Province government.

Province Chief Parshuram Khapung, Chief Minister Thapa and Speaker Baburam Gautam were made defendants.

Thapa was elected as the chief minister with the support of 29 lawmakers of Nepali Congress, 12 of CPN (Maoist Center), four of CPN (Unified Socialist) and one of Janata Samajbadi Party and Speaker Gautam.

With the country grappling with the economic slowdown, the insurance industry has taken a significant hit in the current fiscal year. Both life and non-life insurance businesses experienced single-digit growth in the fiscal year 2022/23.

After experiencing double-digit growth in previous years, the insurance sector (both life and non-life) saw a meager increase of 2.85 percent in 2022/23, which is significantly lower compared to the robust growth of 16.48 percent witnessed in 2021/22.

The preliminary data unveiled by the Nepal Insurance Authority shows that life and nonlife insurers collected insurance premiums totaling Rs 182.88bn in the last FY. In 2021/22, the total premium collection stood at Rs 177.81bn.

The business of life insurance companies surged by 2.64 percent in the last fiscal year while non-life insurance companies saw their business grow by 3.6 percent. 

According to NIA, life insurance companies collected premiums amounting to Rs 142.31 in the last fiscal year, while it was Rs 40.57bn for non-life insurance companies. The premium collection of life insurance companies in 2021/22 stood at Rs 138.64bn and non-life insurance companies at Rs 39.17bn.

Insurance sector experts have termed the growth rate of the non-life insurance business as not encouraging. The growth rate of the non-life insurance business was high in the last few years. “The non-life insurance business has been affected this year due to the economic recession and high prices,”  said an official of the Nepal Insurance Authority.

Among the non-life insurance companies, Shikhar Insurance tops the chart when it comes to premium collection in this fiscal. The company collected Rs 5.52bn in insurance premiums till mid-July 2023. 

Sagarmatha Lumbini Insurance is in the second position with a premium collection worth Rs 4.55bn and Siddhartha Premier Insurance is in the third position with a premium collection of Rs 4.51bn. 

The insurance sector faced significant pressure last year due to various factors, including the economic slowdown, and reduced credit flow from banks and financial institutions. As a result of the sharp decline in public savings capacity, the conducive environment for long-term investment in life insurance could not be sustained throughout the year.

However, the opening of imports of luxury goods, including vehicles, enabled the expansion of business for non-life insurance companies in the second half of the last fiscal year.

Insurers say that the rise in the non-renewal and surrendering of insurance policies has dragged the business down in the last fiscal year.

The main opposition CPN-UML has demanded fair investigation into the smuggling of around 100 kg gold that had passed undetected through the TIA customs.

Speaking in today's meeting of the National Assembly, UML lawmaker Devendra Dahal demanded the formation of a probe committee comprising representatives of the government and various political parties in this regard.

"A high-level probe committee should be formed. If there is no fair investigation by forming such a committee, such incidents of smuggling will continue," he said.

In case of the formation of a parliamentary probe committee, it should also involve representatives of the members of the National Assembly, he said.

He also demanded the response from Home Minister and Finance Minister in the Parliament relating to the security of the airport and probity of customs office while calling for bringing the respective minister and the chief of the airport, and customs office employees under the scope of investigations.

Referring to the airport customs chief and the security chief, who stayed on leave when the gold smuggling took place, he suspected something fishy in the case.

Mentioning that a huge cache of gold was smuggled into Nepal through the airport on July 19, he said, gold smuggling is a serious issue.

"Nepal has become a transit for gold smuggling," he said.

Shortly after Dahal put forth his views, the UML protested the advancement of the Parliament business by the NA Chair Ganesh Prasad Timilsina.

Following the protest, Timilsina said that the schedule for NA members to put their view during the zero hour had been removed.

With Nepal Rastra Bank adopting tighter monetary policy along with a slowdown in loan demand, the commercial banks’ lending grew by a marginal 3.42 percent in the last fiscal year. 

The commercial banks that experienced a liquidity crunch in the first half of the FY 2022/23 saw problems of non-disbursement of loans in the second half of the last fiscal. Bankers said demands for loans have remained low throughout the last fiscal. 

While the NRB had targeted private sector credit growth to 12.6 percent in 2022/23, the actual credit growth remained much lesser than the target. In fact, the credit expansion to the private sector in 2022/23 was far less than what the banks lent in 2021/22. The banks’ lending grew by 3.42 percent in 2022/23 compared to 12.2 percent in 2021/22.

According to bankers, the private sector has not sought bank loans with the deepening economic downturn. On the other hand, retail loans such as housing loans and auto loans did not grow due to higher interest rates. While the BFIs gradually lowered the loan interest rates, the demand for loans did not surge as expected.

According to the data of the Nepal Bankers Association (NBA), commercial banks disbursed loans amounting to Rs 144bn in 2022/23 whereas such loan disbursement in 2021/22 stood at Rs 454bn. The total lending of banks by the end of the last fiscal year stood at Rs 4,318bn. 

“The demands for loans have remained subdued due to the state of the economy and businesses,” said Sudesh Khaling, CEO of Everest Bank, “In the initial months of the last fiscal, credit flow could not increase due to a lack of liquidity in the banking system. Later, when the liquidity situation improved, there was no demand for loans.”

Bankers say the other reason behind the sluggish lending is banks have become more cautious in loan disbursement due to a sharp rise in non-performing loans (NPLs).

According to the private sector, the high-interest rates also contributed to lower demand for loans. The private sector has been demanding that interest rates need to be lowered arguing that the average interest rate of loans remained higher that previous years. 

Deposits of commercial banks increased by 12 percent in 2022/23. The banks’ deposits stood at Rs 5,086bn in mid-July 2023 from Rs 4,541bn in mid-July 2022. The banks’ deposits increased by Rs 545bn in the last fiscal.   

After going through a liquidity crunch in the first half, the banking system was flushed with excess liquidity by the end of the last fiscal. With demands for loans drying up, investable capital piled up in the banking system in the last few months of 2022/23. 

With lesser demand for loans, the CD ratio of commercial banks came down to 82.10 percent in mid-July 2023, which was 88.07 percent in mid-July 2022. As per central bank regulatory norms, banks can disburse 90 percent of their deposits in loans. Banks have to maintain the credit-to-deposit ratio (CD ratio) at 90 percent. 

The Kathmandu Metropolitan City (KMC) has urged taxpayers to pay tax on their businesses within the determined time.

Issuing a notice, the Department of Revenue of the KMC requested to pay tax and get a discount facility. The KMC has offered exemption in property tax, rental tax and business tax.

The notice reads that 10 percent exemption has been offered on the tax amount of the current fiscal year if it is paid within January 14, 2024.

Similarly, additional 30 percent discount would be offered in the case of taxpayers who have operated a hotel, resort or movie theater on their own land or taking such facilities already constructed on lease in the metropolitan city, if they pay property tax with arrears by mid-January 2024.

It is stated that property tax of the parking lot of a building constructed with the purpose of commercial parking of vehicles would be exempted for 10 years from the date of completion of the building construction.

There is a provision of 95 percent discount on business tax and registration fees of an industry or enterprise operated under the 'One Ward, One Model Industry' program for three years after the registration of the industry or business.

A 40 percent tax exemption on the total tax amount has been provided to industries, businesses, companies, organizations registered in the name of women and people from the indigenous nationalities and Dalit communities, people with disabilities of whichever age group and youths below 35 years of age and which are not under tax coverage in the Fiscal Year 2080-81 BS, which have capital investment up to Rs 500,000, if they pay the tax within January 14, 2024.

Similarly, a 25 percent tax exemption has been provided in the case of regular tax-payers.

However, individuals who are the permanent residents of Kathmandu Metropolitan City will get a 50 percent tax exemption on such tax if they pay the tax within the stipulated date.

The Pashupati Area Development Trust (PADT) has come under scrutiny for leasing out large tracts of land at nominal rates to various agencies, raising suspicions of irregularities. 

Jagat Deuja, a member of the National Land Commission, said that the commission was currently examining a report prepared by the PADT regarding its land and property. The investigation includes a review of lands leased out to other agencies, as well as those that have been encroached upon.

One notable case involves the leasing of 1,161 ropanis to the Tribhuvan International Airport (TIA) for a 99-year contract. According to the agreement signed in 2017, TIA is required to pay Rs 10m annually to the PADT. Prior to this agreement, TIA was paying a meager amount equivalent to only one muri three pathis of paddy (approximately 80 kg) per ropani as leasing fee.

The Tilganga Eye Center is another entity that has taken five ropanis of land from PADT on a 49-year lease, with an annual leasing fee of Rs 40,000 per ropani. Although the lease agreement was signed in 2015, the center had been using the land even before that period.

In addition, the PADT has struggled to receive the leasing fee for one ropani of land being used by Gaushala Dharmashala which has been utilizing the land for over 80 years. The leasing contract with Gaushala Dharmashala was signed about 20 years ago, and as per the agreement, PADT is entitled to receive Rs 51,000 annually as leasing fee.

PADT’s land has also faced encroachment by various individuals and groups. Approximately 100 ropanis out of the total 534 ropanis of land in Gothatar have been encroached upon by so-called squatters. Additionally, there have been attempts by various groups to gain control of the land for operating sand quarries.

Finance Minister Dr Prakash Saran Mahat said that the government will provide full support to the probe committee to investigate the gold smuggling case in an independent manner.

Inspecting the Tribhuvan International Airport on Thursday, the finance minister said that some staffers have been suspended after the gold smuggling case, expressing commitment to allow the probe committee to investigate the case independently.

He claimed that the probe committee will find out whether it is the machine or the human weakness in the gold smuggling case.

Minister Mahat said that he has directed the authority concerned to bar the entry of unauthorized persons in the Customs Office.

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Saying that the people could use new technologies to commit crime, he opined that the technologies in the customs office should also be changed as per the time.

Minister Mahat further said that he has already held discussions with the concerned authorities of the airport for the same.

Finance Minister Mahat had inspected the arrival, departure and customs area of the airport.

Deputy Prime Minister and Home Minister Narayan Kaji Shrestha had also inspected the customs area after the gold smuggling case.

Earlier on July 20, the Revenue Investigation Department had recovered around 100 kg of gold that passed out of airport’s customs without being detected from Sinamangal.

The price of gold has increased by Rs 800 per tola in the domestic market on Thursday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 113, 500 per tola today. It was traded at Rs 112, 700 per tola on Wednesday.

Meanwhile, tejabi gold is being traded at Rs 112, 950 per tola. It was traded at Rs 112, 150 per tola.

Similarly, the price of silver has increased by Rs 35 and is being traded at Rs 1, 490 per tola today.