FM Rana, German counterpart discuss issues of bilateral interest

Kathmandu, July 8

Minster for Foreign Affairs Dr. Arzu Rana Deuba held a bilateral meeting with her German counterpart Dr. Johann David Wadephul on Tuesday where the two discussed Nepal-Germany relations, matters of bilateral interest, and a wide range of issues of mutual concern.

FM Dr. Rana recalled that Germany is one of Nepal’s longstanding and major development and trade partners, and expressed her gratitude to the German government and people for their continued support in economic, social, and other sectors, her secretariat informed in a statement.

Emphasising the need to further promote bilateral trade between Nepal and Germany, she called for joint efforts and encouraged stronger networking between the private sectors of both countries. She also invited German investment in Nepal, particularly in areas such as the establishment of a chemical fertiliser plant.

Dr. Rana informed Dr. Wadephul that Nepal is preparing a strategy to ensure a smooth and sustainable transition following its graduation from the Least Developed Country (LDC) status in 2026. She stated that Nepal would require continued support in terms of resources, technology, and financing from Germany, the European Union, and other development partners during this process.

Likewise, mentioning Nepal’s candidacies for membership of the United Nations Human Rights Council for the term 2027–2029, the Economic and Social Council for 2029–2031, and the non-permanent seat on the UN Security Council for 2037–2038, FM Dr. Rana requested for Germany's support. In response, Foreign Minister Dr. Wadephul expressed Germany’s commitment to support Nepal in these candidatures.

Minister Dr. Rana also highlighted that although Germany is the second-largest source of European tourists for Nepal and both countries share great potential in tourism, the absence of direct air connectivity has prevented full utilisation of this potential. She therefore urged for the establishment of direct flights between the two countries.

"Due to the inclusion of Nepali airlines on the EU aviation safety list and the resulting flight ban, there have been serious implications for tourism promotion between Nepal and Europe," she said while mentioning that the Government of Nepal has tabled two bills in Parliament for the restructuring of the Civil Aviation Authority of Nepal.

The proposed legislation incorporates not only global best practices but also aligns with the recommendations of the EU and International Civil Aviation Organisation (ICAO). "Germany, can be a key EU member state, to play a role in lifting the ban on Nepali airlines," said Dr. Rana. In response, Dr. Wadephul assured of full cooperation in this regard.

During the meeting, Dr. Rana also raised the issue of the devastating impacts of climate change in Nepal, highlighting the country’s vulnerability and the severe consequences it is already facing. She expressed Nepal’s hope for Germany’s support in advancing its campaign for climate justice. 

Published in The Rising Nepal daily on 9 July 2025.   

Remittance inflow sees robust increase in FY's 1st 11 months

 Kathmandu, July 8

Nepal witnessed a robust increase in remittance inflows during the first 11 months of the current fiscal year 2024/25 with a year-on-year rise of 15.5 per cent.

According to the latest report published by the Nepal Rastra Bank (NRB) on Tuesday, remittance inflows rose by 15.5 per cent to Rs. 1,532.93 billion, compared to a 17.2 per cent growth in the corresponding period of the previous year.

The report posted a largely positive economic outlook of the country.

In US dollar terms, inflows amounted to USD 11.25 billion, marking a 12.7 per cent rise. The monthly inflow for mid-May to mid-June stood at Rs. 176.32 billion, significantly higher than the Rs. 128.91 billion recorded in the same month last year.

The number of Nepalis taking first-time approvals for foreign employment reached 452,324, with an additional 308,067 receiving approvals for re-entry. Net secondary income, comprising remittance and other transfers, reached Rs. 1,668.30 billion, up from Rs.1,443.10 billion a year ago.

Meanwhile, consumer price inflation moderated notably. Y-o-y inflation stood at 2.72 per cent in mid-June 2025, down from 4.17 per cent a year earlier. Inflation in food and beverages was particularly low at 0.54 per cent, while non-food and services rose by 3.94 per cent. Notably, the price of ghee and oil increased by over 10 per cent, whereas vegetables saw a decline of 7.04 Per cent.

Inflation varied by region, with Koshi Province recording the highest at 4.18 per cent, followed by Sudurpashchim at 3.86 per cent, while Gandaki experienced the lowest inflation at 1.75 per cent. Urban inflation stood at 2.66 per cent, marginally lower than rural inflation at 2.90 per cent.

Nepal’s foreign exchange reserves also saw significant improvement. Gross reserves rose by 25.9 per cent to Rs.2,569.38 billion (USD 18.65 billion) by mid-June 2025, up from Rs. 2,041.10 billion (USD 15.27 billion) in mid-July 2024. Of this, NRB’s own reserves reached Rs.2,274.47 billion, while reserves held by banks and financial institutions grew to Rs. 294.92 billion. Indian currency accounted for 20.5 per cent of the total reserves.

Likewise, the NRB reported that on the foreign exchange adequacy front, current reserves are sufficient to cover 17.6 months of goods imports and 14.7 months of combined goods and services imports. Key reserve ratios – reserves-to-GDP and reserves-to-imports – stood at 42.1 per cent and 122.9 per cent respectively.

The current account remained in surplus at Rs. 307.31 billion (USD 2.26 billion), an improvement from Rs.200.38 billion (USD 1.51 billion) a year earlier. Likewise, the balance of payments (BOP) posted a surplus of Rs.491.44 billion (USD 3.62 billion), up from Rs.425.67 billion (USD 3.2 billion). Foreign direct investment (equity only) reached Rs.11.09 billion, also reflecting increased investor confidence.

Published in The Rising Nepal daily on 9 July 2025.   

FNCCI calls for monetary policy to boost private sector, revitalise economy

Kathmandu, July 8

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has emphasised the need for policy reforms to address the prevailing economic slowdown, risks in the financial sector, and the large share of the informal economy.

The aim is to revitalise the recovering economy, boost private sector confidence, and address risks related to anti-money laundering compliance, it said in its recommendations to Nepal Rastra Bank (NRB) for the Monetary Policy for Fiscal Year 2025/26.

Stating that poor governance and lack of infrastructure have hindered the effectiveness of policy reforms, the FNCCI called for a monetary strategy targeted towards infrastructure development.

A FNCCI delegation led by Acting President Anjan Shrestha, submitted these suggestions to NRB Governor Biswo Nath Poudel on Tuesday.

The federation urged the inclusion of concrete programmes to implement the credit restructuring and rescheduling provisions outlined in the budget for the FY 2025/26, to ensure the facility is accessible to small, medium, and large businesses alike. It further recommended clear and effective implementation of additional working capital provisions and interest penalties waivers.

FNCCI also stressed the need to facilitate easy access to working capital loans for productive sectors, tourism, construction, and housing development companies. It recommended that banks and borrowers be given the authority to decide on working capital loans based on nature of business.

Likewise, citing the decline of the industrial sector’s share in GDP to 12.4 per cent, it proposed that interest rates for industrial loans should be 1–2 per cent lower than that for trade.

Regarding Nepal's upcoming graduation from LDC status in 2026, FNCCI proposed concessional financing policies to sustain the competitiveness of micro, cottage, small, and women-led export-oriented enterprises. It also suggested linking women entrepreneurship loans to production and managing interest subsidies, as well as capping premium rates at 2 per cent for loans up to Rs. 50 million.

Furthermore, FNCCI called for flexibility in the watchlist provisions, and to attract Gen Z into entrepreneurship, it recommended facilitating business registration via the Nagarik App and offering project loans of up to Rs. 10 million. It also urged the implementation of FNCCI’s feasibility study in this regard.

Similarly, it proposed concessional loans for families of migrant workers who send remittances formally while still abroad. It recommended revising the current targeted lending policy to prioritise productive industries, tourism, and infrastructure, and called for the establishment of an asset management company in response to the growing volume of non-performing assets in banks and financial institutions.

Highlighting the prohibition on domestic remittances via remittance companies, FNCCI noted that this policy adversely affects low-income groups, students, informal workers, and those without access to bank accounts or smartphones, especially in remote areas. It recommended allowing internal transfers of up to Rs. 100,000 through remittance companies based on valid ID, equivalent to international cash payouts.

Additional recommendations include increasing the housing loan limit from Rs. 20 million to Rs. 30 million, linking KYC requirements to the National Identity Card to enable electronic access by relevant agencies, and implementing free interoperability for QR payments.

Regarding foreign investments, FNCCI suggested effective implementation of the budget provision allowing Nepali businesses to open sales branches or processing plants abroad and to invest up to 25 per cent of total exports. It also proposed that the monetary policy clarify the provision allowing Nepali citizens to receive sweat equity shares in return for providing technology or specialised services to foreign companies.

Published in The Rising Nepal daily on 9 July 2025.   

Dr. Khatiwada calls for dedicated financial for agriculture

  

Kathmandu, July 7

Economic Development Advisor to the Government of Nepal, Dr. Yuba Raj Khatiwada, has emphasised the need for a specialised financial institution for the development and transformation of the agricultural sector.

Speaking at the 24^th anniversary programme of Sana Kisan Bikas Laghubitta Bittiya Sanstha Ltd. (SKBBL) in Kathmandu on Sunday, he said that a dedicated financial institution is essential to carry out focused activities for the expansion and progress of agriculture.

He highlighted the important role played by the SKBBL in involving small farmers in agriculture, livestock, and income-generating activities. He warned that microfinance institutions would not be sustainable in the long term if they failed to align their programmes with enhancing production among members.

"It is not enough to just provide loans; institutions must also ensure that the investments generate income for their members," he said while praising the efforts of Sana Kisan as a model in this regard.

Dr. Khatiwada, who had also served as the Finance Minister and Governor of the Nepal Rastra Bank, said that due to effective utilisation of government support, the SKBBL had gained the trust of international agencies as well.

Referring to Nepal’s potential for enterprise and income generation through agriculture and livestock, he stressed the need to shift from individual to group-based production and earnings.

Likewise, he noted that there is already a market in third countries for Nepal’s meat products, including buff and pork, and that encouraging farmers to produce healthy livestock with guaranteed market access could raise their income levels.

“For that, we need specialised programmes and financial institutions. Sana Kisan has made progress in this direction and should continue to do so,” he said.

Dr. Khatiwada also recommended that alongside linking members to production and market access through agricultural cooperatives, more efforts should be made in storage, processing, packaging, and branding to further boost income levels.

He raised concerns over the increasing trend of mismanagement in savings cooperatives and small financial groups due to their failure to operate according to cooperative principles. However, he expressed confidence that the problem will gradually be resolved.

As opaque financial activities became more prevalent, the Bank and Financial Institutions Regulation Department of the NRB introduced and enforced the 'Guidelines and Standards for Savings and Credit Cooperatives, 2081', which went into effect on April 3, 2025.

Speaking on the occasion, Chairperson of the institution, Khem Bahadur Pathak, said that poor institutional governance had bred challenges within the cooperative sector.

According to him, the SKBBL has been working with 1,710 partner organisations across all 77 districts, serving 8.8 million members from 2.2 million households. Its focus areas include wholesale lending, capacity building, technology transfer, and youth entrepreneurship.

Similarly, SKBBL's CEO Dr. Shivaram Prasad Koirala, said that honest leadership in cooperatives and microfinance institutions ensures operations run smoothly. He claimed that even during challenging times, small farmer agricultural cooperatives have demonstrated notable performance in terms of transparency, resilience, and member benefit, including liquidity and profit distribution.

The Small Farmers Development Programme began in Nepal in mid-1970s. From 2001, it is being operated as a microfinance institution. Previously, it was registered as the Small Farmers Development Bank.

The institution currently has a paid-up capital of Rs. 4.31 billion including 38.9 per cent from the banks and financial institutions, 27.45 from small farmers cooperatives, 2.36 per cent from international financial institutions, 30.06 per cent from general public and 1.23 per cent from others.

The SKBBL is currently in partnership with 902 small farmer cooperatives and 808 other cooperatives and microfinance institutions.

Published in The Rising Nepal daily on 8 July 2025.   

Policy for collateral-free loans to Nepali migrant workers at final stage

Kathmandu, July 6

The Procedures for Providing Collateral-Free Loans to Nepali migrant workers has reached its final stage, Minister for Labour Employment and Social Security Sharat Singh Bhandari informed on Sunday.

Speaking at the final round of discussions to finalise the draft of the procedures held at the Ministry of Labour, Employment and Social Security (MoLESS), he said the procedure would enable workers to access simple and collateral-free loans.

He expressed concern over Nepali workers falling prey to exorbitant interest rates charged by loan sharks and stated that once implemented, the procedure will enhance their access to finance.

“Of the three 'D's - Debt, Death, and Digital Trap - that I often mention, this policy addresses the debt trap. Workers will be debt-free by the time they return from working abroad, and will also be able to benefit from state-arranged schemes such as social security and insurance,” said Minister Bhandari.

According to him, the procedures align with the government’s policy to offer unsecured loans to those going for foreign employment. He suggested that priority should be given to banks affiliated with the Social Security Fund.

“The key objective is to ensure that bank loans are secure, migrant workers can access financing easily, and they are protected from local loan sharks in their villages,” he said.

The procedure proposes that workers travelling to Gulf countries should be eligible for loans of at least Rs. 200,000, while those heading to Europe may access up to Rs. 500,000.

Saurabh Pokharel, a member of the drafting team from Nepal Rastra Bank, pledged full support for the implementation and suggested refining the procedure to clarify the loan recovery process, informed Minister's Secretariat in a statement.

Similarly, Anil Sharma from the Nepal Bankers’ Association praised the concept and assured that banks would fully cooperate in its implementation.

Labour Secretary Dr. Krishna Hari Pushkar noted that the procedure had remained stalled for a long time and stressed the need to move it forward without delay. He emphasised the importance of providing easy and accessible loans so that migrant workers could manage repayments more effectively upon returning from abroad.

Published in The Rising Nepal daily on 7 July 2025.   

'Seville Commitment milestone for LDCs' development'

PM returns home from Spain

Kathmandu, July 4

Prime Minister K.P. Sharma Oli has returned to Nepal after leading the Nepali delegation at the fourth International Conference on Financing for Development (FfD4) in Seville, Spain, held from June 30 to July 4.

The Prime Minister had led a delegation to Seville at the joint invitation of Spanish Prime Minister Pedro Sánchez Pérez Castejón and United Nations Secretary-General António Guterres. The conference aimed to bolster international cooperation for development and advocate for the needs of least developed countries (LDCs).

Addressing the General Debate of the conference on June 30, 2025, Prime Minister Oli, in his capacity as the Chair of the Global Coordination Bureau of Least Developed Countries, highlighted the significant challenges faced by LDCs. He urged developed nations and development partners to enhance their support and expand partnerships to address these issues.

Upon his arrival from Spain, the Prime Minister expressed confidence that the 'Sevilla Commitment' would serve as a milestone for the smooth and sustainable graduation and overall development and prosperity of LDCs. He also called for greater commitment and effort from the global community to implement this commitment.

During his address, Prime Minister Oli stated that Nepal is on track to graduate from an LDC by 2026 and is actively mobilising the necessary resources for this transition. He appealed to development partners and donor agencies to provide further assistance to Nepal's economic development.

PM Oli co-chaired a multi-stakeholder roundtable on 'Revitalising international development cooperation' where he emphasised the profound impact of poverty, inequality, debt burden, and climate change on LDCs and other developing countries. He underscored the importance of strengthening international development cooperation to tackle these challenges.

Prime Minister Oli also chaired a High-Level Event on LDCs, where he highlighted that these nations grapple with issues such as poverty, hunger, malnutrition, and trade deficits. He pointed out that a significant portion of their budgets is allocated to debt servicing, making it difficult to meet basic needs like education and healthcare for their citizens.

In this context, he called for concrete steps to implement the commitments made at the Financing for Development conference and for practical action plans to reduce the financial gap.

Similarly, Prime Minister Oli addressed the 'Unlocking water and sanitation financing through heads of state initiative', announcing Nepal's inclusion in this campaign related to water and sanitation. He reiterated Nepal's government's commitment to providing citizens with fundamental services, including access to clean drinking water and sanitation, which are enshrined as fundamental rights in Nepal's constitution.

At an event hosted by Spanish Prime Minister Pedro Sánchez, 'Investing in global solidarity: A new vision of development cooperation', Prime Minister Oli underscored the increasing importance of development partnerships for developing nations.

He stressed the need to increase concessional resources for developing countries and adhere to principles related to effective development cooperation to maximise outcomes from such assistance.

On the eve of the conference, June 29, Prime Minister Oli addressed the 'Civil society forum for FfD4', an event organised by civil society on development finance. He said that civil society is a crucial partner in achieving sustainable development goals and advocated for empowering their role in policy formulation, monitoring, and accountability systems.

On the sidelines of the conference, Prime Minister Oli held bilateral meetings with several heads of state and government. He met with Spanish Prime Minister Pedro Sánchez to discuss various matters of bilateral interest between Nepal and Spain. He also held discussions with Estonian President Alar Karis, Portuguese Prime Minister Luís Montenegro, and Egyptian Prime Minister Dr. Mostafa Kamal Madbouly on bilateral interests and concerns.

During his meeting with the Egyptian Prime Minister, Pm Oli appreciated Egypt for its ongoing cooperation in securing the release of Bipin Joshi, a Nepali citizen held captive by HAMAS, and requested continued efforts.

Prime Minister Oli also met with United Nations Secretary-General António Guterres. Their discussions focused on strengthening the relationship between Nepal and the UN, reinforcing multilateralism, and ensuring a sustainable transition for Nepal's graduation from an LDC. Guterres commended Nepal's contributions to UN peacekeeping.

At an interaction organised by the Nepali Embassy in Madrid with the Spanish business community, Prime Minister Oli invited investment in sectors such as hydropower, tourism, infrastructure, agriculture, and information technology. He also participated in an interaction with the Nepali diaspora in Spain, and discussed their potential role in Nepal's development and instructed the Nepali Embassy to undertake more effective and public-oriented initiatives to ensure the welfare and security of Nepalis residing there.

The Ministry of Foreign Affairs (MoFA) maintained that the Prime Minister's active participation elevated Nepal's image on the international stage. His discussions with the Spanish business community and Nepali diaspora are expected to promote investment in Nepal.

PM Oli's delegation included his spouse Radhika Shakya, his chief advisor Bishnu Prasad Rimal, and other senior government officials.

Published in The Rising Nepal daily on 5 July 2025.   

Parties to form panel to probe ‘cooling off’ provision tampering in Civil Service Bill

Kathmandu, July 5

A seven-member special parliamentary committee is to be formed to investigate alleged manipulation and irregularities in the cooling-off period provision of the Federal Civil Service Bill, 2080.

The decision was made during a meeting held on Saturday among the chief whips of various political parties, and chaired by Speaker Devraj Ghimire. Chief Whip of the CPN-UML, Mahesh Bartaula, confirmed the agreement to form the special committee.

According to Rule 180 of the House of Representatives Regulations, 2075, the special committee will include two members each from the Nepali Congress and CPN-UML, and one member each from the CPN (Maoist Centre), Rastriya Swatantra Party (RSP), and Rastriya Prajatantra Party (RPP).

The committee will be led by a representative from the Nepali Congress, according to Bartaula.

The names of the committee members will be announced in the meeting of the House of Representatives scheduled for Monday. The upcoming session of Parliament will endorse the decision to form the committee, which will then be granted 15 days to conduct its investigation and study.

The original bill tabled at the Parliament had a mandatory cooling-off period for civil servants before they could enter politics or accept political appointments after their retirement or resignation. But when it was passed, the provision had been changed weakening it significantly by allowing the retired civil servants to hold the public and constitutional posts.

The formation of the probe committee has come after the ratified bill drew widespread criticism from the lawmakers, civil society and media.

The committee is expected to identify how the changes occurred and who was responsible, and recommend corrective measures and actions. 

Published in The Rising Nepal daily on 6 July 2025.