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Twenty commercial banks in the country collectively earned a net profit of Rs 43.49bn over the first eight months of fiscal year 2024-25. According to Nepal Rastra Bank (NRB), the net profit over the period is 2.81 percent more than Rs 42.3bn that these banks reported in the same period of the previous fiscal year. 

Net profits of 11 commercial banks went up in the period, while nine saw a decline in their respective net profits. Nepal Bank Ltd logged the highest gain of 132.9 percent, with its net profit rising from
Rs 1.28bn in the first month of the previous fiscal year to Rs 2.98bn in the same period of the current fiscal year. Nepal Investment Mega Bank ltd (45.68 percent), Prabhu Bank (39.65 percent) and Global IME Bank Ltd (37.76 percent) also made significant net profit gains in the review period.

On the contrary, NIC Asia Bank (NIC) reported the biggest drop of 67.75 percent in its net profit.
NIC Asia’s net profit fell to Rs 819.99m in the first eight months of the current fiscal year, down from Rs 2.54bn in the same period of the previous fiscal year. Agricultural Development Bank Ltd (62.66 percent), Rastriya Banijya Bank Ltd (40.09 percent) and Kumari Bank Ltd (31.98 percent) also reported a significant drop in their net profits.

Nabil Bank led the pack with a net profit of Rs 4.78bn over the first eight months of the current fiscal year. Global IME Bank (Rs 4.72bn) and Nepal Investment Mega Bank  (Rs 4.08bn) were the other banks with net profits in excess of Rs 4bn. 

Meanwhile, three commercial banks reported profit below Rs 1bn. Agricultural Development Bank reported the lowest net profit of Rs 738.03m, followed by NIC Asia Bank and Kumari Bank Ltd with net profits of Rs 819.99m and Rs 969.11m, respectively. Bankers say rising non-performing loan levels and declining investments have hit profitability of banks. 

The price of gold has dropped by Rs 1,700 per tola in the domestic market on Tuesday.

According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow metal is being traded at Rs 184, 300 per tola today. It was traded at Rs 186, 000 per tola on Sunday.

Similarly, the silver is being traded at Rs 1, 945 per tola today.

The development expenditure has shrunk to 29 percent until the third quarter of the current fiscal year 2024/25.

According to the data of the Financial Comptroller General Office, the capital expenditure of the government as of April 12, 2025 is only Rs 102.9 billion. The government had allocated Rs 352.35 billion under the capital heading for the current fiscal year. The capital expenditure so far is 29.2 percent of the annual allocation.

Not only the development expenditure, but the overall budget expenditure of this period has been weak. As compared to the annual allocation, 53.67 percent of the budget has been spent till April 13.

The government had presented a budget of Rs 1 trillion 860 billion and 30 million for the current fiscal year. An amount of Rs 998.50 billion has been spent till this April 13.

Similarly, out of Rs 1 trillion 140 billion and 66 million allocated under the current head, 59.45 percent or Rs 678.06 billion has been spent, according to the Financial Comptroller General's Office.

The expenditure under the financial management heading is equivalent to Rs 59.23 percent till April 13. For the current fiscal year, the government has allocated Rs 367.28 billion under this heading, and of this 59.23 percent of the annual allocation has been spent.

Revenue collection also weak

The revenue collection is also weak in this period. Out of the total revenue collection target of Rs 1 trillion 419 billion and 30 million, only Rs 821.67 billion has been collected in revenue till April 11. This is equivalent to 57.89 per cent of the annual target.

Similarly, only Rs 14.26 billion in foreign grants or 27.27 per cent of the annual target has been collected so far against the target of collecting Rs 52.32 billion in foreign grants this year.

The High-Level Economic Reform Advisory Commission has identified a declining consumption growth rate and a reduction in investment as the primary reasons for the sluggish economic growth rate. The commission, formed under the leadership of former Finance Secretary Rameshore Khanal, has suggested that immediate policy interventions are necessary to improve the demand side. To achieve high economic growth, it has recommended structural reforms on the supply side to create an investment-friendly environment and reduce production costs to enhance competitiveness of Nepali goods.

According to the commission’s report, reduced credit growth, declining real estate transactions, millions of rupees trapped in cooperatives, delays in government payments, issues in recovering commercial credit, and a crisis in the construction sector have led to reduced consumption and investment. “Delays in balancing certain monetary tools used for relief during the pandemic, insufficient activation of fiscal policy, and import control policies caused the economy to face successive problems. As a result, the economy has experienced further stagnation over the past two fiscal years,” the commission said in its report.

It has recommended reducing barriers and expanding opportunities in sectors critical for economic growth, such as agriculture, forestry, land, mining, water resources, tourism and information technology. To create opportunities in these sectors, the commission has emphasized the need for policy interventions in physical infrastructure development, urban development, energy security, education and skill development, health and research and development.

The commission has urged the government to implement the suggestions provided by the High-Level Public Expenditure Review Commission and the High-Level Tax Reform Committee regarding public expenditure, revenue policy and administration. To create an industrial and business-friendly environment, the commission has proposed establishing a single registration entity where all types of businesses can register, and taking the entire registration process online. It has also suggested making all business registrations free and eliminating the need for renewals.

Likewise, the commission has proposed allowing up to 50 percent foreign investment based on the evaluation of investment proposals. It has suggested that Nepali firms or companies permitted to invest abroad should pursue double taxation avoidance agreements and bilateral investment agreements with approved countries. It has also called on the government to abolish the Department of Revenue Investigation Department and the Revenue Leakage Act, transferring investigations related to foreign exchange misuse to the Department of Money Laundering Investigation.

To make farm subsidies effective, it has urged the government to distribute subsidies to farmers through a single-window system through the local government. Likewise, it has suggested creating a Farmers’ Welfare Fund in collaboration with provincial and local governments to provide subsidized loans.

The commission also said in its report that businesses should not be restricted by setting a maximum profit ceiling. Likewise, it has urged the government to make bank interest rates stable, at least for productive sectors. “Since Nepal’s exchange rate is fixed with the Indian currency, it causes fluctuations in the external sector to impact domestic banking liquidity and lead to volatility in interest rates,” the commission said in its report.

Stating that the lack of collateral is preventing many, especially startups, from accessing bank loans, the commission has suggested that introduction of a personal credit scoring system would facilitate loan disbursements for small businesses.