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Nepal Rastra Bank (NRB) has introduced a stricter legal framework requiring banks and financial institutions (BFIs) to channel their corporate social responsibility (CSR) funds only into poverty alleviation and other priority sectors.  Issuing a circular to licensed banks and financial institutions last week, the central bank said it has amended the Guidelines on Corporate Social Responsibility, 2024, to prevent arbitrary spending by banks and financial institutions.

The move follows a directive order from the Supreme Court. The apex court had issued a directive order on 2 Dec 2024, hearing a writ petition filed by Advocate Shashi Basnet and eight others. The full text of the verdict released in the second week of July directed the government to register an umbrella bill in parliament within two years to regulate CSR activities more effectively.

Stating that many institutions were spending CSR money contrary to its intended purpose, including for branding exercises or private projects, the top court had ordered the government to ensure that CSR funds are used primarily for poverty alleviation and to hold institutions accountable if funds are diverted. The Supreme Court has clearly stated that such funds must be spent on housing, education, health, children and women's empowerment, specifically targeting communities living in extreme poverty.

Banks and financial institutions are required to set aside at least one percent of their annual profit for CSR initiatives. Given that class ‘A’ banks alone posted a combined net profit of Rs 71.51bn in fiscal year 2024/25, a substantial fund is collected in their CSR funds. However, spending from such funds had remained arbitrary so far. As per the new guidelines, these funds must now directly benefit the poor, marginalized and targeted communities rather than be used for institutional promotion and large-scale projects.

The central bank has said that CSR spending must align with national priorities and international principles of social responsibility, with the goal of uplifting disadvantaged groups and creating a more inclusive and sustainable society. 

The revised guidelines also make it mandatory for banks and financial institutions to prepare an annual CSR action plan. Likewise, banks and financial institutions are required to submit a list of their bi-annual  activities to the central bank at least 15 days before each half-year period begins. For the current fiscal year, banks have been given until mid-October to submit their first semi-annual plan.

The central bank has clearly stated that CSR funds must be used responsibly to enhance social welfare and not as a tool for corporate publicity. In the revised guidelines, the central bank has also upheld the Supreme Court’s call for stronger accountability mechanisms to ensure the funds reach communities in need.

The Nepal Stock Exchange (NEPSE) plunged by 15. 64 points to close at 2, 726. 33 points on Wednesday.

Similarly, the sensitive index dropped by 2. 74  points to close at 470. 94 points.

A total of 11,345,994-unit shares of 326 companies were traded for Rs 4. 72 billion.

Meanwhile, Him Star Urja Company Limited (HIMSTAR) was the top gainer today with its price surging by 9. 99 percent. Likewise, Liberty Energy Company Limited (LEC) was the top loser as its price fell by 6. 99 percent.

At the end of the day, the total market capitalization stood at Rs 1. 54 trillion.

Suspension bridges in the hilly areas of the district are usually completed within two to three years. However, the suspension bridge over the Budhigandaki River between Samagaun and Samdo on the Manaslu trekking route has remained incomplete for the past 10 years, with only a temporary jeep crossing in place.

Former ward chairperson Bir Bahadur Lama said the project agreement was signed in the fiscal year 2015/16, but no significant progress has been made beyond the jeep arrangement. Without the bridge, foreign tourists visiting the Manaslu region via Larke, local residents commuting between Samagaun and Samdo, and travelers heading to Ruila on the Tibetan border are compelled to cross the Budhigandaki under unsafe conditions.

Lama criticized the repeated delays, stating that deadlines have been extended year after year without visible progress. He called for the immediate construction of the bridge, or alternatively, the removal of the jeep crossing and restoration of the land. He also noted that despite the prolonged delay, the suffering of residents in these remote areas has been largely overlooked. Meanwhile, foreign organizations such as Kaduri have managed to build multiple suspension bridges in the region during the same period.

According to the Suspension Bridge Division Office, the Government of Nepal had contracted Hari Hari Sharmila JV Company to build the 220-meter-long, three-meter-wide bridge within 18 months. Sub-engineer Jayaprakash Giri said the delay was caused by negligence on the part of the construction company.

Current ward chairperson Karma Chhewang Lama said the community has repeatedly appealed to the bridge division but has yet to see results. “We have approached the department several times, but they keep avoiding responsibility. We are still hopeful the bridge will finally be built,” he said.

According to constitutional provisions, the Madhes Province Government has the authority to manage industries with investments of up to Rs 500 million. However, files of industries established prior to the formation of the province remain stuck in federal-level departments under the Ministry of Industry, Commerce and Supplies, creating complications in their renewal and operation.

Madhes Province Minister for Industry, Commerce and Tourism, Basanta Kushwaha, said delays in transferring authority from Singha Durbar to the provinces have caused disorder and difficulties for industries. “The lack of documents has created problems in renovation, relocation, fines, and other industrial activities,” he said. Minister Kushwaha has submitted a seven-point memorandum to Union Minister for Industry, Commerce and Supplies Damodar Bhandari, calling for urgent action. He emphasized that the delay in implementing the powers guaranteed by the constitution has placed additional burdens on both the provincial government and industrialists in Madhes.

As per Sub-section 2 of Section 4 of the Industrial Business Act, 2019, registration, capital increases, relocation, and related activities for industries within Madhes Province (excluding those specified in Sub-section 1 of Section 4 of the 2010 Act) should fall under provincial jurisdiction. While Madhes Province has established an office of the Department of Industries in Birgunj, the Federal Department of Industries in Tripureshwor continues to handle much of the work. Minister Kushwaha noted that the federal government’s failure to transfer files on time has seriously hindered provincial performance, forcing industrialists to travel to Kathmandu for tasks that should be managed locally.

The memorandum further demands the transfer of industry files with fixed capital up to Rs 500m to the province. “Not only will this make our offices more effective, but it will also ensure employees have sufficient work,” Kushwaha stated. He also called for delegating environmental oversight of sand processing and crusher industries to the province, as well as inspection and enforcement authority regarding pollution from large industries—about 100 of which operate in Madhes Province.

Other demands include strengthening staff capacity in industrial administration, establishing startups and incubation centers, and creating mechanisms for sharing sectoral knowledge. Minister Kushwaha also stressed that exemptions under the Federal Economic Act should be granted based on recommendations from the provincial ministry.

In addition, the province has requested the transfer of responsibilities for special economic zones, industrial zones, industrial villages, export promotion zones, and IT parks. Madhes currently hosts the Simara Special Economic Zone and the Gajendra Narayan Singh Industrial Zone.

Responding to these concerns, Federal Minister for Industry, Commerce and Supplies Damodar Bhandari said efforts to transfer constitutionally mandated powers to the provinces will move forward soon. “We will hold discussions with the commerce ministers of all seven provinces and take the work ahead,” he said.