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Residential housing loans have shown sluggish growth despite banks and financial institutions (BFIs) prioritizing the sector and offering competitive rates. 

According to the latest data from the Nepal Rastra Bank, housing loans up to Rs 20m extended by commercial banks increased by just 4.07 percent over the past year, reflecting the broader slowdown in credit expansion and the economy.

Total housing loans under Rs 20m increased to Rs 325.36bn in mid-May 2025, up from Rs 312.63bn in mid-May last year. This reflects a low appetite for residential borrowing even though interest rates have dropped to some of the lowest levels yet.

Although banks are offering home loans at premiums of less than one percent above their base rates, credit disbursement has remained below expectations. Bankers say that although housing and real estate loans are a top priority, weak consumer confidence and sectoral distress have hindered credit uptake.

The Nepal Rastra Bank (NRB) has been adopting more flexible policies to boost lending in the real estate sector. The central bank last year reduced the risk weight on housing loans above Rs 5m to 125 percent through a monetary policy review. It allowed homebuyers to use up to 70 percent of their income for loan repayment—principal and interest combined. Before that, only 50 percent of a borrower’s income could be allocated for loan installment payments.

Bankers attribute the slowdown primarily to the ongoing economic downturn, which has dampened individual income and weakened borrowing capacity. “The majority of people can no longer verify stable income sources, making it difficult to qualify for new loans,” one banker said.

Among commercial banks, NIC Asia Bank has the highest exposure to residential housing loans with Rs 48.7bn invested in loans under Rs 20m. Global IME Bank was next with a total housing loan portfolio of Rs 39.94bn. Nepal SBI Bank has the lowest at Rs 2.42bn.

The real estate sector itself is going through a severe downturn, with banks failing to offload their non-banking assets despite publishing auction notices repeatedly. When borrowers default on loans, banks and financial institutions (BFIs) acquire the property pledged as collateral. Banks are supposed to sell off these properties at the earliest and recover their investment, but a slowdown in the real estate sector means banks are not finding buyers. This accumulation of non-banking assets is hitting bank profitability.

Nepal Rastra Bank (NRB) has adopted a more flexible approach to direct sector lending by granting banks and financial institutions an additional year to meet mandatory credit flow targets for specific priority sectors.

Through an amendment to its Unified Directives for Banks and Financial Institutions, the central bank extended the deadline to meet minimum lending requirements in agriculture and small and medium enterprises (SMEs). Previously, commercial banks were required to meet these sectoral lending thresholds by mid-July 2027. With the revision, banks now have until mid-July 2028 to comply.

Under the new provision, commercial banks must gradually increase credit exposure in agriculture and SMEs to reach 15 percent of their total loan portfolio by mid-2028. The phased targets require banks to achieve 11 percent by mid-July 2025, 12 percent by mid-July 2026, 13 percent by mid-July 2027 and 15 percent by mid-July 2085. Previously, banks were expected to achieve 12 percent by this fiscal year, 13 percent by mid-2026 and 15 percent by mid- 2027.
Similarly, development banks are now required to channel at least 20 percent of their total loans into agriculture, cottage, small-scale industries, energy, and tourism by the extended deadline of mid-July 2028. Likewise, Class ‘C’ finance companies must disburse at least 15 percent of their total loans to these sectors by mid-July 2028.

NRB has also introduced flexibility for commercial banks that have already met the minimum lending requirement in the agriculture sector but are struggling to meet quotas in other areas. These banks are now allowed to allocate the shortfall to their area of expertise, provided the total lending across all targeted sectors meets the required percentage.

In addition, the central bank has allowed restructuring and rescheduling of loans up to Rs. 20m disbursed in agriculture, energy, and SMEs, if the borrower faces financial difficulties. The provision allows a one-time rescheduling based on the borrower’s request and a detailed assessment of the business plan and cash flow, provided at least 10 percent of the due interest has been recovered.

However, NRB has imposed strict conditions on such restructuring. As per the new provision, restructuring must be completed by mid-September, the restructured loan must retain at least the same risk classification as of mid-December last year and previously made loss provisions cannot be reversed during restructuring.

At 10:30 am, Dundrup Tsering, a businessperson from Nepal, waited at Lektse Port in the city of Xigaze, southwest China's Tibet Autonomous Region, carrying two large bags. “I’ve been doing business here since the opening of the port in Nov 2023, and my family’s living conditions have improved significantly,” said Dundrup Tsering.

In the past, traders set up stalls at traditional border trade points under simple tents with no fixed locations. Their goods were often damaged by rain or snow, and access to basic facilities like toilets was a constant challenge. The opening of the port and the completion of a modern trade market have significantly improved conditions. “We have moved into a proper market with better conditions. It is more convenient and rent-free,” said Dundrup Tsering. “My family had almost no income before the port opened. Now we no longer worry about food or clothing.”

Beyond boosting employment, the new and reopened ports along the China-Nepal border have accelerated regional cross-border trade. “Our products are specifically designed for Nepal’s needs,” said Jiang Zhengguang, chairperson of a machinery company located approximately an hour’s drive from the port of Gyirong.

In the company’s four bright and tidy workshops, workers were busy producing vehicles for export. “We’ve developed innovative new energy vehicles (NEVs) for Nepal’s rugged mountain roads, steep slopes, and high load requirements,” Jiang added. “Nepali customers said that our vehicles offered top-tier quality and performance. We expect annual exports to exceed 2,000 units.”

With the reopening of the ports of Zham, Gyirong and Burang in 2023, NEVs can now reach Nepal from manufacturing hubs within ten days. From January to May this year, Xizang’s import-export volume with Nepal reached about $249m, up 14 percent year on year, according to Lhasa Customs.

To facilitate trade, Lhasa Customs has established a green channel, supporting 24-hour advance declarations, and providing one-on-one assistance. Exports of NEVs, local wool, and fresh fruits are increasing, while imports of Nepalese medicinal herbs and silage fodder continue to diversify as more categories gain market access.

Since 2021, Xizang’s trade with South Asian Association for Regional Cooperation (SAARC) members has totaled $2.08bn, with Nepal accounting for 87 percent. The land ports between China and Nepal have played a vital role.

The government has formed a high-level panel  under former Chief Secretary Shanker Das Bairagi to investigate the visit-visa scam. Home Minister Ramesh Lekhak speaking in Parliament informed that joint-secretaries of six ministries are the members of the committee. 

The members are: Tirtha Raj Chilwal (Finance Ministry), Aruna Joshi (Law, Justice and Parliamentary Affairs Ministry), Ram Krishna Lamichhane (Ministry of Culture, Tourism and Civil Aviation), Mani Ratna Koirala (Foreign Ministry), Pradip Koirala (Ministry of Labour, Employment and Social Security) and Ananda Kafle (Home Ministry). 

The Home Minister further said that the committee was formed as per the commitment to take concrete initiative for policy-level, legal and structural reforms in order to resolve visit-visa related problems seen since the past. Earlier, ruling parties and opposition parties had agreed to form a high-level probe committee regarding the visit visa scam, which ended three-week long house disruption. 

Meanwhile, opposition parties—Rastriya Swatantra Party and Rastriya Prajatantra Party–have expressed their disagreement with the high-level study and probe committee.  Swarnim Wagle of RSP  said the committee formed under a former Chief Secretary is not acceptable to them. He demanded a parliamentary probe committee under coordination of incumbent or former justice.  

Gyan Bahadur Shahi of RPP demanded an investigation covering all 14 home ministers appointed in the last 18 years vis-a-vis the visa scam. “We cannot accept this committee simply because it cannot deliver justice. This matter is above politics and power and action should be taken against all guilty, regardless of their positions,” he argued. The two parties continue to obstruct the Parliament, though CPN (Maoist) seems to have parted ways with them on this issue.

Two opposition parties—Rastriya Swatantra Party and Rastriya Prajatantra Party, have expressed their dissatisfaction over the formation of the probe committee under the headship of former Chief Secretary Shanker Das Bairagi to investigate the visit visa scam. 

Putting forth his view, RSP lawmaker Swarnim Wagle said the committee formed under the chairmanship of former Chief Secretary Bairagi is not acceptable to them.

He added that it was necessary to form the parliamentary probe committee under coordination of incumbent or former justice.

Similarly, Gyan Bahadur Shahi of RPP demanded an investigation on 14 home ministers appointed in the last 18 years regarding the visit visa scam.

"We cannot accept this committee. This committee cannot provide justice. This matter is above political and power interest. Action should be taken against all guilty whoever they are", he argued.

Lawmakers of two parties boycotted the meeting after putting forth their views.

The government formed a high-level study and investigation committee under the chairmanship of Bairagi to investigate the visit visa scam today.

The committee consists of Tirtha Raj Chilwal (Finance Ministry), Aruna Joshi (Law, Justice and Parliamentary Affairs Ministry), Ram Krishna Lamichhane (Ministry of Culture, Tourism and Civil Aviation), Mani Ratna Koirala (Foreign Ministry), Pradip Koirala (Ministry of Labour, Employment and Social Security) and Ananda Kafle (Home Ministry).

The government has formed a high-level study and investigation committee under the headship of former Chief Secretary Shanker Das Bairagi to investigate the visit visa scam. 

Demanding the time with Speaker Devraj Ghimire in the beginning of today's meeting of the House of Representatives, Home Minister Ramesh Lekhak responded to the queries of lawmakers put forth on contemporary issues.

On the occasion, he shared that joint-secretaries of six ministries are the members of the probe committee.

The committee consists of Tirtha Raj Chilwal (Finance Ministry), Aruna Joshi (Law, Justice and Parliamentary Affairs Ministry), Ram Krishna Lamichhane (Ministry of Culture, Tourism and Civil Aviation), Mani Ratna Koirala (Foreign Ministry), Pradip Koirala (Ministry of Labour, Employment and Social Security) and Ananda Kafle (Home Ministry).

Minister Lekhak mentioned that the committee was formed to resolve the visit visa related problems seen since the past. 

Earlier, ruling parties and opposition parties had agreed to form a high-level probe committee to investigate the visit visa scam.

Is the heat making you want to shut the windows, turn on the AC, and stay inside the house? As it gets unbelievably hot, all we want to do is the bare minimum. But it would be almost blasphemous not to make use of the longer days by indulging in activities that are far more pleasurable in summer. While we definitely recommend staying out of the scorching heat or using an umbrella, if you must go out in the sun, there are a good number of things that you can do when it’s hot outside and you want to do nothing more than plonk yourself in front of the TV.

Water workouts 

Many places these days offer water workouts like aqua zumba and competitive swimming. Sign up for a class so that you can get a workout in while chilling in the pool during hot summer days. If you don’t know how to swim, then there can never be a better time to learn. You can even make this a couple’s thing and get some quality time or enroll in classes with friends.

Evening stroll

Take advantage of the longer daylight hours and head out for an evening stroll after work. Visit local haunts or discover some place new in your area. Patan Durbar Square comes alive in the evenings with vendors, temper-goers, and people just lazing around. Local parks and even malls are good places to hang around in the evening when the sun is milder and there’s a gentle breeze in the air. This could be a good time to get a little workout in as well.

Get creative

There are many classes and workshops that you can enroll in when the days are longer and you seem to have more time. From candle-making and pottery to cooking and photography, there is just so much to choose from. You don’t have to commit to these long term, if you don’t want to. Sign up for a class and see how you feel about it. It’s a good way to learn something new while staying away from the heat but not slouched on your couch or bed.

Plan a party

Too lazy to go out and meet friends over the weekend? Why not invite them over and turn it into a fun summer meet up? You can prepare some light snacks and drinks or order-in. Decide what you want to do beforehand. Do you want to indulge in a round of board games? Or is watching a scary movie more your thing? Depending on what you want to do, you can plan your day around it. It’s always a good idea to spend some time together and bond.

Paint and sip

The concept of painting something while indulging in some wine or cocktails had become quite a trend when House of Palettes, an art center in Jhamsikhel, Lalitpur, came up with it. Slowly, the novelty died down but there are many places that offer the same facility these days. There are also many pop up places that offer the service at reasonable prices during the weekend as well. It’s a particularly enjoyable activity on a hot summer day.

Spa day

The hot weather is the perfect excuse to pamper yourself. Book yourself a manicure, pedicure session and throw in a full body massage as well. This is again another thing you can do with your partner or a friend. We recommend Ayurvedic massages and treatments that are extremely relaxing. An entire day at the spa is such a perfect way to spend a particularly hot summer day when you don’t want to do much else. 

The Nepal Stock Exchange (NEPSE) gained 1.08 points to close at 2,601.84 points on Tuesday.

Similarly, the sensitive index surged by 0.52 points to close at 445. 59 points.

A total of 13,818,559-unit shares of 316 companies were traded for Rs 5. 76 billion.

Meanwhile, Om Megashree Pharmaceuticals Limited (OMPL) was the top gainer today, with its price surging by 1. 01 percent.

Likewise, 10% NIC Asia Debenture 2085/86 (NICAD85/86) was the top loser as its price fell by 5. 17 percent.

At the end of the day, total market capitalization stood at Rs 4. 33 trillion.