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The price of gold has increased by Rs 600 per tola in the domestic market on Wednesday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 109, 800 per tola today. The gold was traded at Rs 109, 200 per tola on Tuesday. Meanwhile, tejabi gold is being traded at Rs 109, 300 per tola. It was traded at Rs 108, 700 per tola. Similarly, the silver is being traded at Rs 1,360 per tola today.

After a gap of 12 years, the Securities Board of Nepal (Sebon) has again started issuing stock brokerage licenses. A board meeting of the securities market regulator on Monday decided to issue stock brokerage licenses to seven firms out of 43 companies that have received the letters of intent (LoIs). According to Sebon, the seven firms have been granted licenses in the first phase. Those permitted to operate brokerage services are Bhole Ganesh Securities, Capital Max Securities, Himalayan Brokerage Company, Sun Securities, Mio Securities, Share Pro Securities, and Property Wizard Limited. The last time Sebon issued stock brokerage licenses was in 2011 when the regulator granted permission to 27 firms. Sebon Spokesperson Mukti Shrestha said that the board will gradually grant licenses to the firms who've received the LoIs. At present, there are 50 brokerage companies operating in Nepal including a stock dealer company. On 18 Sept 2022, Sebon issued a public notice inviting interested firms to apply for brokerage licenses. After the Supreme Court's interlocutory interim order in the first week of November, Sebon stopped the process of issuing new licenses to new stock exchanges, commodity exchanges, and stock brokerage firms. The issuance of licenses to new brokerage firms got pace after the Supreme Court in the second week of April canceled a writ petition. Subsequently, Sebon issued LoIs to 43 firms. While issuing the LoIs, Sebon had said that firms must prepare necessary infrastructures such as office and software within six months. The board has issued LoI to subsidiary companies of seven banks - Nabil Bank, the then Mega Bank, Citizens Bank, Kumari Bank, NMB Bank, Rastriya Banijya Bank, and Sanima Bank to conduct stock brokerage transactions. However, the companies are yet to receive licenses. While the issuance of stock brokerage licenses has moved ahead, the licensing process of the new stock exchange has been halted for now, following instructions from Prime Minister Pushpa Kamal Dahal. The process has been stalled after Prime Minister Dahal directed officials not to proceed with the process of granting a license to the new stock exchange for the time being. This comes amid allegations from various quarters that the government was trying to grant the license for the new stock exchange to benefit certain individuals and business groups. Three companies have applied for the new stock exchange, namely the Himalayan Stock Exchange, National Stock Exchange, and Annapurna Stock Exchange. The top corporate groups of the country are in a race to get the license to operate a new stock exchange. The Sebon had formed an evaluation committee for the issuance of licenses for a new stock exchange and commodities exchanges led by Phanindra Gautam, Joint Secretary at the Ministry of Law, Justice, and Parliamentary Affairs. The committee had started evaluating the proposals of three companies when the Prime Minister directed to halt the process.  

The decline in the profit of commercial banks has also hit the government’s tax collection from the banking sector. The income tax payment from the banking sector to the government has declined by 5.59 percent in the nine months of the current fiscal year 2022/23. The banks paid a total of Rs 19.99bn in income tax to the government as of the third quarter of the current fiscal year compared to Rs 21.16bn in the corresponding period of the last fiscal year. According to bankers, the decline in profit in the current fiscal year has directly affected the income tax. “As banks’ income and profit took a beating this year, their contribution to the income tax also suffered,” said Anil Sharma, CEO of Nepal Bankers’ Association (NBA). With bad loans increasing gradually from the start of the current fiscal year, the banks have reported a sharp rise in non-performing loans (NPLs) in the last three months. Bankers attribute the rise in NPLs to the slowing economic activities coupled with higher interest rates, and borrowers’ inability to repay debts. According to them, loan recovery and debt servicing have become difficult of late. With loan recovery and debt servicing becoming difficult, banks have been forced to provision huge amounts for NPLs. On the other hand, the high-interest rate that banks were forced to pay for their deposits in the first half of the current fiscal year, has increased their cost of funds. The NPL of commercial banks stood at 3.03 percent till mid-April, 2023. As NPLs surged sharply, the loan loss provisions of banks also increased. The amount for provisioning has increased by 324.27 percent. Banks have set aside Rs 31.32bn for loan loss provisions till mid-April 2023 compared to Rs 7.38 billion during the same period of the last fiscal year. While banks’ interest income grew by 31.60 percent, their interest expenses expanded by much higher during this period. As banks have to pay higher interest rates for deposits amid a prolonged liquidity crunch, their interest expense surged by 34.98 percent. This has affected the bank's net interest income which grew by 25.43 percent. Banks saw their net fee income and net trading income shrinking in the first nine months of the current fiscal. The net fee income decreased by 5.03 percent while net trading income shrunk by 36.74 percent during this period. The challenging macroeconomic climate has affected the profitability of banks; the commercial banks recorded a net profit of Rs 48.18bn in the third quarter of this fiscal compared to Rs 51.01bn during the same period of the last fiscal. Banks and financial institutions (BFIs) have to pay 30 percent in income tax in Nepal. Among the commercial banks, Nabil Bank paid the highest income tax of Rs 2.19bn, followed by NIC Asia Bank with Rs 1.72bn and Global IME Bank with Rs 1.7bn. Income tax paid by commercial banks FY 2022/23, Q3 Rs 19.99 billion FY 2021/22, Q3 Rs 21.16 billion FY 2020/21, Q3 Rs 21.91 billion  

The Millennium Challenge Accounts-Nepal (MCA-Nepal) has announced concrete progress in the implementation of the Millennium Challenge Corporation's Nepal Compact program, a US development grant program. The announcement of MCA Nepal, a special purpose vehicle (SPV) established to implement the MCC Compact, has come at a time when Jonathan Brooks, Deputy Vice President of MCC for Europe, Asia, the Pacific, and Latin America, is currently visiting Nepal. According to MCA-Nepal, six bidders have participated in a bidding process to construct the 315 km long transmission line. The bidders, all of whom are Indian contractors, were confirmed after the MCA-Nepal on May 22, opened the bid for the project. Megha Engineering and Infrastructure Ltd, Power Mech Projects Ltd, Kalpataru Power Transmission Ltd, KEC International Ltd, Transrail Lighting Ltd, Tata Projects Ltd, and Larsen & Toubro Ltd participated in the bidding process. MCA-Nepal has said that the minutes of the bid opening with details will be made available on its website soon. “These are companies participating in three separate packages of the transmission lines,” said a source at MCA-Nepal. “Even though the bid was opened for companies from all the world including from the United States and China too, only the Indian companies participated in the bidding process.” It is an important milestone for MCC which was mired in controversy before the MCC-Compact’s ratification by the Nepal’s House of Representatives on Feb 27 last year. The bidders have been confirmed ahead of the compact's entry into force in August this year. According to the MCA-Nepal source, many of the bidders have already worked in Nepal. However, the number of bidders appears to be relatively lower with only six companies participating in all three packages of the contract that include Lapsiphedi-Ratmate-New Hetauda 400kV D/C Transmission Line, Ratmate-New Damauli 400kV D/C Transmission Line, New Damauli-New Butwal 400kV D/C Transmission Line (Base), and New Butwal -Nepal/India Border 400kV D/C Transmission Line. The source said that Brooks visited Nepal to observe the preparatory works before the entry into force of the MCC Compact. With the political environment in the country becoming favorable, MCA-Nepal expects to implement the project without much disturbance. The SPV plans to complete determining the compensation to be paid to the owners of the land for the construction of transmission lines before the implementation date starts in August. The rules of the MCC require the compact to be implemented within five years after the start of the implementation date. Nevertheless, it will not be easier for MCA-Nepal to overcome the possible challenges related to the acquisition of land, a problem constantly appearing in other projects in the country as well. According to the MCA-Nepal source, the SPV also does not expect to complete the acquisition of lands when the implementation of the project begins. “It is impossible to complete land acquisition before the entry into force of the Compact,” the source said. Even MCC’s Deputy Vice-President Brooks had highlighted the importance of land acquisition and forest clearance during his meeting with Deputy Prime Minister and Home Minister Narayan Kaji Shrestha on May 20. “As the project should be completed in five years, Brooks brought up issues like the agreement between Nepal and India on the cross-border transmission line, land acquisition and forest clearance,” the Home Minister's secretariat said in a press statement. As Chief District Officer heads a committee to determine the compensation of the acquired lands and right of way for the transmission line, the US official sought support from the Home Ministry to ease the hurdles, according to Nepali officials. Brooks also met with Finance Minister Prakash Sharan Mahat on Monday. The two officials held extensive discussions on the remaining works to be carried out before implementing the project. Dr. Mahat expressed commitment to completing the project as soon as possible by concluding the important matters in the project cycle by fulfilling due legal procedures as soon as possible. MCA Nepal officials say that the MCC project has not been facing any significant political hurdles after its endorsement by the House of Representatives last year with an interpretative declaration. Deputy Prime Minister Shrestha also promised to implement the project successfully considering that the MCC Compact has already been endorsed by the Nepali parliament.