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After a long wait, Mahindra's flagship global SUV - the XUV700 has been launched in Nepal. Mahindra & Mahindra, India’s leading SUV manufacturer, launched the XUV700 in India last year, but the SUV's Nepal launch was delayed due to the import restrictions enforced by the Nepal government. Agni Incorporated Pvt. Ltd., the authorized distributor of Mahindra vehicles in Nepal launched the XUV700 on Monday amid a function held in Kathmandu. Outside of India, Nepal is the second market after South Africa where the XUV700 is being launched. In Nepal, the XUV700 is available with the gasoline engine, manual and automatic options in five and seven-seater capacities. The Mahindra XUV700 has been launched at an attractive price starting at Rs 7.4 million. The introductory price is applicable for one month from the launch with early delivery in February 2023. "The XUV700 sets a new benchmark in the premium SUV segment of Nepal. Premium features on board the SUV include a 10.25-inch touchscreen infotainment system and cluster, a six-way powered driver seat, and class-leading music system with 12 Sony speakers," states the press statement issued by Agni Incorporated. According to the company, the latest Mahindra SUV comes up with a panoramic sunroof and dual-zone climate control. Mahindra has also achieved a major milestone with the 5-star safety rating by GNCAP for adult protection and the SUV also became the first made-in-India and owned brand to offer Autonomous Emergency Braking (AEB) as a safety option. Agni Incorporated has introduced three variants of the XUV700—AX3, AX5, and AX7—currently for the Nepali market. The SUV has a 2.0mStallion Turbo-petrol engine that delivers 147 kW power and 380 Nm of torque. It is coupled with a smooth-shifting 6-speed manual & automatic transmission system, offering an effortless and thrilling drive experience. The XUV700 offers best-in-class performance through multi-link suspension with a stabilizer bar and FSD (Frequency Selective Damping) technology. The XUV700 is also powered with a first-in-segment feature—‘Smart door handles’, prominent wheel haunches above the wheel arches, and LED Clear-view Headlamps. The company said that safety is one of the core pillars of the XUV700 as it comes up with 7 airbags. The SUV offers comprehensive Advanced Driving Assistance Systems (ADAS) in the AX7 variant. This includes Smart Pilot Assist, Adaptive Cruise Control, Automatic Emergency Braking, Lane Departure Warning, Lane Keep Assist, and Event Traffic Sign Recognition as standard. The automatic headlamps with High Beam Assist dynamically adjust the illumination of dark areas on the road, without blinding oncoming traffic. Safety is further taken care of by tire pressure monitoring systems, an additional reverse camera, an intelligent driver drowsiness detection system, and Stop and Go driving function as part of its adaptive cruise control. According to Agni Incorporated, the XUV700 will be offered from the Twin Peaks branded SUV showroom, which has been curated to provide Nepalese customers with a premium experience. Initially, the XUV700 will be offered from two Twin Peak-branded showrooms in Kathmandu. The Twin Peaks network will be expanded to five showrooms across Nepal by March 23. The new showroom has been designed to elevate the customer experience and bring in a new customer base for Mahindra. Pricing details (ex-showroom in Rs, in m)    AX3 Series

With the sharp slowdown in economic activities in the last one year, payments through electronic modes have also taken a beating in this fiscal year. From the beginning of the current fiscal year, there has been a gradual decline in electronic payment transactions every month. The latest statistics of the Nepal Rastra Bank (NRB) show that digital payments in the country have been continuously shrinking from mid-July to mid-December on a month-over-month basis. Generally, digital payments in Nepal pick up during the festive months of October and November as consumer consumption increases during these months. However, the festive season this year was mired in the economic slowdown impacting digital payments. Also, the FIFA World Cup Qatar 2022, which took place from November 20-December 18, did not lift the consumption activities allowing sluggishness in digital payments to continue. Digital transactions in Nepal took a giant leap after the start of the Covid-19 pandemic in early 2020 which forced people to stay inside their homes during the lockdowns. Backed by the increasing use of smartphones, consumers were fast to adopt digital modes of payments and online shopping to buy daily essential items. The monthly digit payments reached an all-time high of Rs 6,227.648 billion in the last month of FY 2021/22. However, electronic transactions have been on a decline every month in this fiscal year. The NRB data shows digital payments worth Rs 5,688.626 billion took place in Shrawan (mid-July to mid-August), Rs 4,926.715 billion in Bhadra (mid-August to mid-September), Rs 4,605.316 billion in Ashoj (mid-September to mid-October), Rs 3.946.194 billion in Kartik (mid-October to mid-November) and Rs 3,697.658 billion in Mangshir (mid-November to mid-December). Similarly, the real-time gross settlement (RTGS) has shrunk to Rs 2,436.541 billion in Mangshir (mid-November to mid-December) from Rs 4,349 billion in Ashar (mid-June to mid-July). Internet banking transactions stood at Rs 1,1.476 billion in Mangsir, down from Rs 15.638 billion in Ashar. In the meantime, cash withdrawals from automated teller machines (ATMs) declined to Rs 75.224 billion during the review period from Rs 79.459 billion in Ashar. Mobile banking transactions went down to Rs 160.036 billion from Rs 162.255 billion. Wallet transactions have also declined to Rs 17.730 billion from Rs 17.752 billion. However, Quick Response (QR) payments increased to Rs 19.346 billion from Rs 14.526 billion. Transactions made through the point of sales (POS) decreased to Rs 4.459 billion from Rs 5.183 billion. Digital payments were on an increasing trend till the last fiscal year. This trend has reversed in the current fiscal year. Bankers and experts point out the current economic slowdown for this. According to them, the spending capacity of consumers has been hard hit by rising inflation resulting in a decline in digital payments. According to Sanjeev Subba, CEO of Nepal Electronic Payment System (NEPS), as economic activities slowed down, the direct impacts have been seen in electronic transactions. Guru Prasad Paudel, Chief of Payment System Department at NRB says the decline in digital payments is a reflection of the contraction in economic activities. "While we directly cannot say digital transactions are on the decline, the slowdown in economic activities, the prolonged liquidity crunch, and other problems have affected digital transactions," he said. Box Electronic Payment Transactions

Sagarmatha Insurance Company and Lumbini General Insurance Company have signed the final agreement for the merger. Both companies signed the final agreement on Tuesday. The agreement was signed by Manohar Das Mull, Chairman of Lumbini General Insurance, and Ramakrishna Manandhar, Chairman of Sagarmatha Insurance. As per the agreement, the name of the new entity formed after the merger will be Sagarmatha Lumbini Insurance Company Limited. A special proposal regarding the merger will be tabled in the upcoming general meetings of both companies. Based on the initial agreement between the two companies and the DDA report, the share swap ratio will be maintained at 100:80. Post-merger, the paid-up capital of the company will be Rs 2.62 billion. There will be three each from Sagarmatha Insurance and Lumbini General Insurance on the board of the Sagarmatha Lumbini Insurance Company. The current CEO of Sagarmatha Insurance Chunki Chhetri will be the chief executive officer of the Sagarmatha Lumbini General Insurance Company. The merger drive in the Nepali insurance sector is in full swing. In the last one year, a series of merger agreements have been signed among both, life insurance and non-life insurance companies. The merger momentum in the Nepali insurance sector intensified after the Nepal Insurance Authority (NIA) increased the minimum paid-up capital requirements for insurers of both categories. The authority has increased the paid-up capital of non-life insurance companies to Rs 2 billion while it is Rs 5 billion for life insurance companies. The authority has been pushing for consolidation in the Nepali insurance sector since the new Chairman Surya Silwal took charge of NIA. 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 merger process. According to NIA, 10 non-life insurance companies have signed merger MoUs to become five, while nine life insurance companies have also signed merger deals to become four entities. So far, two life insurance companies and 4 non-life insurance companies have completed the merger process and started their integration business. The remaining seven life insurance companies and six non-life insurance companies have not been able to start integrated businesses yet. There have been two successful mergers in the non-life insurance sector in the past year. In July 2022, Himalayan General Insurance and Everest Insurance merged to form Himalayan Everest Insurance Insurance Co. Ltd. Similarly, in October, Sanima General Insurance and General Insurance Company merged to form Sanima GIC Insurance Ltd. The first merger among the life insurance companies took place in the last week of December 2022 when two life insurance companies - Surya Life Insurance and Jyoti Life Insurance - completed their merger process and started integrated business as Suryajyoti Life Insurance Company.

In a clear indication that the liquidity situation in the banking system is easing notably, Nepal Rastra Bank (NRB) issued a reverse repo worth Rs 5 billion last week. A reverse repo is the central bank's monetary instrument to mop up excess liquidity from the market. While issuing the reverse repo, the central bank borrows money from commercial banks to mop up liquidity in the banks. It was the first time in 18 months that the central bank took a move to absorb excess money in circulation. Earlier, the NRB issued a reverse repo amounting to Rs 28.35 billion on July 20, 2021. According to an NRB official who spoke under the condition of anonymity, the latest reverse repo was issued to test the market response. “The banks responded by parking their funds in the central bank which suggests the liquidity situation in the banking sector is easing,” said the official. Easing of liquidity also means that loanable funds are available with the banks. Another indication of the easing liquidity in the banking system is the decreasing interest rate of inter-bank lending which has come down to 4.23 percent on January 27 from 7.34 percent on January 18. According to NRB, the interest rate was 8.15 percent on January 1. “The banks are not using the standing liquidity facility (SLF) and the overnight liquid facility (OLF) to inject liquidity for the last few weeks,” another official of NRB said. “This suggests that liquidity has eased in the banking sector. It will help to reduce interest rates in the coming days.” According to the official, banks have already started lowering the interest rate on deposits and interest rate on lending is also expected to be lowered at least after the fourth quarter of the current fiscal year. The banking system faced a prolonged and a severe liquidity crunch which resulted from massive lending and slow deposit collection in the early months of the last fiscal year 2021/22. With deposits not increasing in the proportion of the lending, the banking system faced a severe liquidity crunch forcing the banks and financial institutions to suspend new lending from the second half of the last fiscal year. Through the monetary policy for the current fiscal year, NRB announced measures to help banks and financial institutions to maintain more liquidity. NRB reduced the targeted growth rate of credit expansion to the private sector to 12.6 percent from the targeted 19 percent in the last fiscal year. As the overexpansion of credit caused a steep jump in imports leading to the depletion of foreign currency reserves besides contributing to high inflation in the last fiscal year, the central bank came up with a plan to reduce the expansion of credit and money supply in the market through the monetary policy. With the banks focusing on deposit collection mostly through fixed deposits, total deposits from the start of the current fiscal year increased by Rs 200 billion till January 28 while the total extension of loans increased by Rs 103 billion, according to NRB. “With deposits increasing by a higher percentage than lending, there has been improvement in liquidity,” the NRB official said. However, most of the deposits the banks and financial institutions received are in the form of fixed deposits. The ratio of fixed deposits to total deposits is around 60 percent, according to NRB. “That’s why many banks will face a liquidity shortage if a few big fixed depositors withdraw their deposits,” said a CEO of a commercial bank.