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Nepal Insurance Authority (NIA) has directed the insurance companies that have failed to increase their paid-up capital by the mid-April, 2023 deadline to submit their applications for extension for capital increment. However, insurance companies have to furnish their clarification for not being able to raise the capital as per the deadline. According to NIA officials, insurance companies will be given three months deadline to raise their capital if the authority is satisfied with the clarification submitted by the insurers. A year ago, NIA required non-life insurers to have Rs 2 billion in paid-up capital, while it is Rs 5 billion for life insurance companies, by mid-April 2023. After the majority of insurance companies failed to meet the deadline, NIA extended the deadline to mid-July, 2023. Only four insurance companies have been to raise their capital as per the regulatory requirement so far. Among the life insurance companies, the paid-up capital of Nepal Life Insurance Company is above Rs 5 billion. Three non-life insurance companies, namely Shikhar Insurance, Siddhartha Premier Insurance and Sagarmatha Lumbini Insurance have also met the new capital requirement. With NIA pushing for capital increment, the majority of insurers have opted for mergers to increase their capital base. Of the 19 insurance companies involved in the merger process, six companies have merged to become three and have started their integrated business while 13 others are still in the process of completing their mergers. However, the paid-up capital of many companies is below the regulatory requirement even after the mergers. Such companies have sought to raise their paid-up capital through right share issuance and NIA has responded positively to their proposals. Those companies who've not opted for mergers have reported to NIA that they are planning to increase their capital by either bringing foreign partners or selling assets. Prabhu Insurance and Nepal Insurance have told the authority that they would complete the capital increment by mid-July 2023. NIA sources say Prabhu Insurance is trying to bring foreign partners while Nepal Insurance is planning to raise capital by selling its assets. In the case of NLG Insurance, its main investor, National Life Insurance Company, plans to increase the capital. The four new life insurance companies are gearing up to increase their paid-up capital by adding promoters' shares and IPO issuance. Citizens Life Insurance, Sun Nepal Life Insurance, Reliable Life, and IME Life Insurance have not issued IPOs so far. These companies are now planning to add promoters' shares first, and then go for IPO issuance. Some of these companies have plans to issue IPO at a premium price and then for the right share issuance to meet the regulatory requirement. As of now, Citizen Life has Rs 2.62 billion, Sun Nepal has Rs 2.24 billion, Reliable Nepal Life has Rs 2.8 billion and IME Life has Rs 2.8 billion in paid-up capital. According to NIA, foreign promoters of insurance companies such as Metlife Nepal and The Oriental Insurance are adding investments to fulfill the new capital requirement.  Meanwhile, the government-owned Rastriya Beema Company and Rastriya Beema Sansthan along with Asian Life Insurance are yet to submit their capital increment plan to NIA.  

With the country's capital market going through a bearish run, the income of commercial banks from share investments has taken a huge beating in this fiscal year. The third quarter financial report shows banks' share trading income has decreased by 36.73 percent on average. The 21 commercial banks operating in the country have earned Rs 4.08 billion from share trading till mid-April 2023 compared to Rs 6.45 billion during the same period of the last fiscal year. In the last fiscal year, the stock market was on a bullish trend which pushed the share income of banks higher. However, such income of banks has declined this year as the Nepal Stock Exchange (Nepse) is going through a lean period. The benchmark index is currently hovering below 1,900 points. Among the commercial banks, Standard Chartered Bank Nepal has earned the highest income from share trading by the end of the third quarter of the current fiscal year. The bank posted earnings of Rs 447.2 million during this period followed by Nabil Bank with Rs 377 million and Global IME Bank with Rs 366 million. The Agricultural Development Bank Limited has posted a loss in the share trading in this fiscal. The third quarter report shows the bank suffered a loss of Rs 22.45 million this year from share trading. The bank also incurred a loss of Rs 76.79 million in share trading during the same period of the last fiscal year. While the banks' share trading income has decreased, two banks have managed to increase such income this year. The income from share trading of Nepal SBI Bank and Machhapuchchhre Bank increased in the third quarter compared to the last fiscal year Machhapuchchhre posted an earning of Rs 273.38 million in the period, an increase of 51 percent from Rs 181.5 million in the same period of the last fiscal year. Similarly, Nepal SBI's share trading income increased to Rs 236.6 million in the third quarter, a jump of 29 percent from Rs 183.2 million in the same period of the last fiscal year.

The price of gold has increased by Rs 100 per tola in the domestic market on Sunday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the precious yellow metal is being traded at Rs 109, 200 per tola today. The gold was traded at Rs 109, 100 per tola on Friday. Meanwhile, tejabi gold is being traded at Rs 108, 700 per tola. It was traded at Rs 108, 600 per tola. Similarly, the silver is being traded at Rs 1,415 per tola today.

The Nepal Electricity Authority (NEA), which is currently importing electricity from India to manage the power supply within the country, is gearing up for electricity export to its southern neighbor from the third week of May. As the water level in the rivers is increasing with the start of pre-monsoon rainfall and melting of snow due to summer heat, NEA has said that electricity generation from big power plants will increase, enabling it to start power export from the third week of May. The authority started to export electricity to India last year from the first week of June. As the installed capacity of electricity has increased by 700MW over the past year, NEA believes it can export more electricity this year compared to last year. NEA Executive Director Kulman Ghising said that the state-owned power utility will start exporting electricity from the third week of May. "As the pre-monsoon season is approaching, the flow of water in the rivers will increase," said Ghising, "We have started making our internal preparations accordingly." According to NEA, there have been rains across the country in the last two weeks and electricity generation has also increased. The authority claims that electricity generation will further increase after the pre-monsoon begins. Although Nepal has started exporting surplus electricity to India during the wet season, it has to import electricity in the dry season to meet the power demand. It is because almost all of the power production in the country is based on run-of-the-river hydropower plants. The dry season runs from December to April while the wet season lasts from May to November. According to NEA, the run-of-the-river type hydropower projects usually produce less than 40 percent of their installed capacity as water levels in the rivers decrease significantly during the dry season. During the wet season, when there is more water in the river, the electricity generation is also higher. At that time, the production is more than the demand in Nepal. The excess electricity is exported to India. Now, the NEA plans to export 1,200 MW this year to India. The NEA has been selling electricity in the day-ahead market of Indian Energy Exchange Limited (IX) through daily bidding. Currently, the southern neighbor has allowed Nepal to sell 452.6 MW of electricity generated by 10 hydropower projects in the Indian power market. But the approvals given to the 10 hydropower projects need to be renewed every year. NEA has forwarded the list of additional projects including the 452 MW Upper Tamakoshi Project, the electricity of which it plans to sell to India. If the southern neighbor accepts the new list, the state-owned power utility can be able to export power according to its target. As per NEA's estimation, the country's installed capacity will reach 2,800 MW by this wet season. With peak electricity demand in Nepal around 1,750 MW, the NEA believes it can export up to 1,200 MW during the wet season. Nepal earned over Rs 11 billion by supplying excess power to India from early June to mid-December, 2022. Nepal first started exporting power to India in early November 2021 through a competitive bidding process. But after exporting for a few weeks, Nepal stopped selling power to India in December amid a reduction in power generation in the dry season. Exports resumed in 2022 with the start of the monsoon in early June. The NEA sold 1.35 billion units of electricity to India since then and earned Rs 11.16 billion. The power was sold at a rate between Rs 6.58 and Rs 12.15 a unit. NEA earned Rs 2.83 billion from exports from July to the end of the last fiscal year 2021/22 and an additional Rs 8.32 billion since the start of the new fiscal year 2022/23. The authority has set a target of Rs 16 billion within the current fiscal after resuming exports in May.