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The Securities Board of Nepal (Sebon) has issued Letters of Intent (LOIs) for the license of securities businessmen (securities brokers and securities dealers) to additional 13 brokerage firms. The Sebon board meeting on Wednesday decided to issue the LoIs. The Sebon had issued LoIs to 16 firms earlier this week. The brokerage firms receiving LoIs on Wednesday are Sunrise Capital, JBNL Securities, Sharepro Securities, Stockesescarts Securities, Property Wizard Limited, Capital Hub Pvt Ltd, Milky Way Share Broker Company, Blue Chip Securities, Garima Securities, Kalas Stock Market, Money World Share Exchange, Subhakamana Securities, and Miyo Securities. After Sebon invited applications for new stock brokerage licenses, a total of 45 companies applied for the license. The Sebon on May 1 had issued LoI to 16 companies in the first phase. Of the 16 companies that received LoIs from Sebon for stock brokerage licenses, seven are the subsidiaries of commercial banks.

The price of gold has dropped by Rs 1, 200 per tola in the domestic market on Sunday. According to the Federation of Nepal Gold and Silver Dealers’ Association, the yellow bullion is being traded at Rs 110, 600 per tola today. The yellow metal was traded at Rs 111, 000 per tola on Thursday. Meanwhile, tejabi gold is being traded at Rs 110, 050 per tola. Similarly, the silver is being traded at Rs 1,445 per tola today.

With hardly three weeks left for the government to bring the federal budget for the next fiscal year 2023/24, the government on Wednesday replaced the Finance Secretary. Transferring the incumbent Finance Secretary Toyam Raya to the Office of the Vice President, Arjun Pokharel has been brought in at the Finance Ministry. The reshuffle of the top bureaucratic post in the Finance Ministry was doing rounds in the past few weeks in Singha Durbar after Dr. Prakash Saran Mahat was appointed as the Finance Minister. However, the replacement of the finance secretary ahead of the federal budget has invited more questions at a time when the government is drafting a new budget amid a severe resource crunch. Economists say that given the current state of the economy, the next federal budget should be prepared with utmost planning and that frequently replacing the Finance Secretary doesn't augur well for the budget preparations and the country’s economy. In fact, the Finance Ministry has seen four secretaries over the past year. When FY 2022/23 started, Madhu Marasini was the Finance Secretary. However, he left the ministry following a dispute with the then Finance Minister Janardan Sharma. Then, Krishna Hari Pushkar was appointed to the post and replaced by Toyam Raya later when the new government was formed after the parliamentary elections and Bishnu Poudel became the Finance Minister. Poudel brought in Raya as new Finance Secretary who hardly spent four months at the ministry before he was replaced by Arjun Pokharel. Hard hit by the resource crunch, the government is not in a situation to announce new programs and projects in the next fiscal year's budget. The National Planning Commission (NPC) has also recommended the government to reduce the budget ceiling. Given the mismatch between revenue collection and expenditure, the NPC has set a limit of Rs 1,688.4bn for the next year's federal budget. The government has set a target of raising Rs 1403bn in revenue in this fiscal year. However, in the first 10 and half months, it has succeeded to collect only Rs 713bn which is only 50.84 percent of the target. With revenue worth Rs 2.5bn being collected daily, it looks quite impossible to meet the revenue collection target in the next 70 days. Economists are of the view that since the revenue collection has been very poor in this fiscal year, there is no possibility to increase the revenue estimate for the next fiscal year. They say, if there is no increment in revenue, there will be no space to bring more programs. While the current situation demands a prudent budget, the developments in recent weeks including bringing in a new finance secretary suggest the Finance Ministry could succumb to the pressure of the political leadership. Sources at the NPC and Finance Ministry said there has been pressure on them to increase the budget ceiling. Lawmakers and political leaders have been asking for special projects, especially in their constituencies. The Nepali Congress lawmakers have already asked the finance minister to reintroduce the highly controversial Local Infrastructure Development Partnership Program, popularly known as the 'constituency development fund'. As per the constitutional obligation, the government has to present the federal budget on Jestha 15 (May 29). With only 24 days left for the budget presentation in the parliament, the Finance Secretary has many tasks, including preparing crucial documents such as the government's policies and programs, economic survey, and economic act, apart from the budget. Analysts say the new finance secretary will have limited time to grasp the severity of the situation and prepare such documents. "Bringing a new person as Finance Secretary just ahead of the budget will not give a good signal," said economist Keshav Acharya. "There is very little time for the new finance secretary." According to him, the need of the hour is an experienced and responsible person in the Ministry of Finance who can convince the Prime Minister, Ministers, and other stakeholders.  

With the government pursuing the citizens to open bank accounts for savings with initiatives such as the “One Person, One Bank Account” campaign, and the need for a bank account to receive social security payments, savings account use has jumped dramatically in the last decade. A new report by International Finance Corporation (IFC) and United Nations Capital Development Fund (UNCDF) shows the number of adults who have their savings in formal financial institutions has increased from 40 percent in 2014 to 63 percent in 2022. According to the report titled 'Nepal Financial Inclusion Report 2023' states 36 percent of Nepali adults have savings in banks, while 27 percent have their savings in other formal financial institutions, mainly in saving and credit cooperatives (SACCOs) which are not regulated by the central bank. However, the growth in savings is higher than at the banks. Bank savings increased from 27 percent to 36 percent while savings with other formal financial service providers increased from 13 percent to 27 percent in 2022. The growth in formal savings has also been driven by other policy initiatives. The Nepal Rastra Bank (NRB) has directed banks and financial institutions (BFIs) under its purview to increase access points to financial services across the country. Similarly, the mandatory requirement of bank accounts for migrant workers to get foreign employment permits, and the additional one percent interest on remittance deposit accounts have encouraged many migrant workers and remittance-receiving households to use formal channels to remit money and for savings. The government's recent move to allow Nepali migrant workers abroad to participate in primary market Initial Public Offerings (IPOs) is expected to drive both formal remittances and bank savings. The report says the usage of formal savings mechanisms is higher among women, with 66 percent of them saving using formal channels (banks – 33 percent and other formal financial service providers – 32 percent ) while men are trailing lower at 59 percent (banks – 38 percent and other formal financial service providers – 21 percent). Urban adults have higher usage of formal savings channels at 64 percent, while rural adults have usage at 58 percent. The growth has largely been aided by attractive returns on long-term deposit accounts resulting in a rise in formal savings. The role of NRB has also been instrumental in driving long-term deposits, as the share of total fixed deposit accounts has surpassed savings accounts. "As of mid-July 2022, fixed deposits accounted for 55 percent, savings deposits – for 27.2 percent, demand deposits – for 9 percent, and other deposits – for 8.8 percent of the total deposits," reads the report. There has been tremendous growth in the usage of formal credit in the past decade as the number of adults having credit access has increased to 47 percent in 2022 from 14 percent in 2014. Of this 47 percent, 34 percent used banks while 13 percent used other formal financial channels. The use of informal credit has decreased from 23 percent in 2014 to 8 percent in 2022, largely due to increased reach and expansion of formal channels across the country. "The increased usage of credit from the formal sector is an outcome of strong structural market development in the financial sector," says the report. Bank credit usage has grown across urban and rural areas and reached 45 percent of the rural and 49 percent of the urban population. It was only 17 percent and 21 percent respectively in 2014. With the increase in uptake of formal credit, the usage of informal channels has come down drastically in both rural at 9 percent and in urban areas at 6 percent, which stood at 26 percent and 11 percent, respectively, in 2014. Contrary to the situation where 46 percent of women have higher usage of formal savings mechanisms, men have slightly higher usage of formal credit at 49 percent. The credit distribution through BFIs has been gradually increasing over the years. Of the total credit distribution by BFIs, 57 percent has been disbursed in metropolitan areas, 29 percent in sub-metropolitan areas, 11 percent in municipalities, and 3 percent in rural municipalities. As of mid-July 2022, BFIs had 1.83 million loan accounts, up 77 percent from 1.03 million in 2015. The report says

• The number of adults who have their savings in formal financial institutions has increased from 40 percent in 2014 to 63 percent in 2022.
• 36 percent of Nepali adults have savings in banks, while 27 percent have their savings in other formal financial institutions
• The usage of formal savings mechanisms is higher among women, with 66 percent of them saving using formal channels while men are trailing lower at 59 percent
• The number of adults having credit access has increased to 47 percent in 2022 from 14 percent in 2014.
• Bank credit usage has grown across urban and rural areas and reached 45 percent of the rural and 49 percent of the urban population.
• Of the total credit distribution by BFIs, 57 percent has been disbursed in metropolitan areas, 29 percent in sub-metropolitan areas, 11 percent in municipalities, and 3 percent in rural municipalities