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Non-banking assets of the banks and financial institutions have surged past Rs 50bn as bad loans rise and banks fail to offload collateralized properties. According to Nepal Rastra Bank, BFIs collectively held Rs 50.56bn worth of NBAs as of the first month of the current fiscal year i.e. mid-August. Commercial banks, development banks and financial institutions held Rs 7.69bn worth of such assets in mid-July 2021. It increased to Rs 10.52bn in 2022 and further to Rs 18.68bn in mid-July 2023.

NBAs nearly doubled to Rs 35.5bn in mid-July 2024 as the central bank withdrew facilities provided to borrowers as a relief during the Covid-19 pandemic. It increased further to Rs 50.55bn in mid-July this year.   Most of these collateralized properties are in the form of land and houses. 

Banking experts say non-banking assets are piling up as banks have not been able to auction off properties due to a lack of buyers amid slowdown in land and housing transactions. “Since there is a lack of liquidity in the market since the cooperative sector ran into trouble, banks have been unable to find buyers for land and houses under their ownership,” a banker said. “In such a situation, banks have no option but to keep collateralized properties under their books.”

As per the existing laws, banks must issue successive auction notices of 35 days, 21 days and seven days before starting the process of disposing off collateral. Banks can proceed with auction notices only if borrowers remain unresponsive to banks. Even after going through this lengthy process, banks are finding few buyers for land and houses under their books. 

Compounding the woes for BFIs is a provision in the Land Act, 2021, which requires banks, financial institutions and cooperatives to sell off foreclosed land within three years. With non-banking assets piling up, banks have been lobbying to relax this provision.

Bankers have long been calling for the formation of a ‘bad bank’ to take over their distressed assets. The High-level Economic Reforms Advisory Commission led by Former Finance Secretary Rameshore Prasad Khanal suggested to the government to form an agency to manage non-banking assets in the banking system.

Khanal has now been appointed as the Minister for Finance in the interim government led by Sushila Karki. The central bank has already drafted legislation to facilitate such a body and forwarded it to the finance ministry for approval. 

The petroleum products of Rs 26.33 billion were imported from Bigunj Customs Point in the first two months of the current fiscal year.

The Birgunj Customs Point imported diesel, petrol, LP gas, aviation turbine fuel (ATF) and kerosene worth Rs 26.33 billion during the period, Chief Customs Administrator Bishnu Prasad Gyawali said.

According to Gyawali, the imports increased by Rs 1.76 billion in the review period compared to the same period of the last fiscal year. 

With the increase in imports, the revenue collection also rose by Rs 1.29 billion, he added. 

The office had collected Rs 9.89 billion from the imports of the petroleum products in the first two months of last fiscal year, while the revenue collection under the same title reached Rs 11.18 billion in the review period of the current fiscal year, Gyawali shared.

The buckwheat harvest season has begun in the Tsum valley of northern Gorkha. According to local resident Pasang Phunjo Lama, farmers in Chhekampar, located at an altitude of 3,000 to 3,500 meters, are now busy bringing in their crops.

The main crops of Chhekampar in Chumnubri Rural Municipality-7 are wheat, buckwheat, and potatoes. Wheat was harvested about a month ago, and now it is time for buckwheat. “Wheat takes 11 months to ripen, while buckwheat ripens in six,” says Lama, who is also the outgoing ward chairman. “We don’t cultivate the same crop in the same field every year. That’s why we rotate between wheat, potatoes, and buckwheat. If we plant buckwheat one year, we plant wheat for the next three years, and then buckwheat again.”

This year’s buckwheat yield has been excellent, he says. “Even when preparing dhindo, if you mix two parts wheat flour with one part buckwheat flour, it tastes delicious.”

Locals claim that buckwheat grown in the high Himalayan climate is of superior quality and even medicinal. Lamas in major monasteries in Kathmandu are known to buy flour from here, which sells for 120 rupees per gram. “This flour is believed to help with diabetes and jaundice,” Lama adds. “Since there is no motorable road to the village, orders from Kathmandu are sent either by helicopter or mule. We also feed buckwheat flour to yaks and cows, as it is considered medicinal for them too.” 

Once the season begins, farmers from Chhekam, Paro, Jong Ngakyu, Leru, Lamagaun, Burji, Lar, Phurpe, Chhule, and Nile villages take turns harvesting buckwheat through a traditional system of rotation. In recent years, however, some have also started using machines brought from Tibet. “This year, we too harvested with the help of such machines,” Lama says.

Non-life insurance companies have received a total of 1,984 claims due to arson and vandalism during the GenZ protest in Kathmandu and different parts of the country on Sept 8 and 9. Government offices, business establishments and private homes were torched and vandalized after security personnel used excessive force to disperse protesters. A total of 74 people died in different parts of the country during the protest. Hotel Hilton Kathmandu has said that it alone suffered damages worth Rs 8bn.

Hundreds of government and private vehicles were torched and vandalized in those two days. According to the Nepal Insurance Authority (NIA), the estimated value of these claims is around Rs 20.7bn. Fourteen non-life insurance companies and four non-life microinsurance companies have received claims for losses during the GenZ protest.

Seven companies have received claims worth more than a billion rupees each, while the rest have claims below that threshold, according to the NIA. The unusual circumstances created by the protests have placed heavy compensation obligations on insurers.

Among individual insurers, Shikhar Insurance has received the highest number of claims so far, with 366 cases amounting to Rs 2.39bn. However, in terms of value, The Oriental Insurance and Siddhartha Premier Insurance top the list. Oriental has registered 40 claims totaling Rs 5.14bn, while Siddhartha has logged 258 claims worth Rs 4.93bn.

Other major insurers by claim value include IME Prudential Insurance with 24 claims amounting to Rs 1.59bn and Sagarmatha Lumbini Insurance with 233 claims worth Rs 1.47bn. Together, the top five insurers account for a significant portion of the total claims. Among microinsurers, Protective Microinsurance tops the list with nine claims totaling Rs 113m, followed by Star Microinsurance with six claims worth Rs 67m. Similarly, Nepal Microinsurance has received 15 claims worth Rs 56m, while Trust Microinsurance has the smallest exposure, with eight claims totaling Rs 42m.

An official at the NIA said the regulator has instructed insurance companies to ensure timely settlement of claims for policyholders affected by the exceptional circumstances.