NRB’s assets surge to Rs 26.23 tn, set to transfer Rs 42 bn to the government

KATHMANDU: Nepal Rastra Bank (NRB) has reported a sharp expansion in its financial position, with total assets and liabilities reaching Rs 26.23 trillion at the end of FY 2081/82 (mid-July 2024). According to the annual report submitted to the government, the central bank’s financial standing grew by 29.23% compared to the previous fiscal year.

The central bank has decided to allocate required amounts to various internal funds and transfer Rs 42 billion to the Government of Nepal. This amount is Rs 5 billion higher than the Rs 37.22 billion transferred in the previous fiscal year.

Income Rises by Over 9%

As per the annual financial statements, NRB’s net income before foreign exchange revaluation gains/losses stood at Rs 80.48 billion, reflecting a 9.11% increase from the previous year. The bank reported that investment returns from foreign currency reserves remain its principal income source. Additionally, liquidity-related operations in the domestic financial system have contributed to earnings—especially during periods of tightening liquidity.

However, the central bank has also faced rising expenses in liquidity management. Due to excess liquidity in recent years, NRB spent nearly Rs 9 billion last year to mop up surplus cash from the financial system. The bank expects liquidity management costs to increase further in the current fiscal year.

Report Submitted to Finance Ministry

Governor Prof. Dr. Bishwanath Paudel formally submitted the annual report to Finance Minister Rameshwor Prasad Khanal on Sunday. The report is prepared in compliance with Section 91 of the Nepal Rastra Bank Act, 2058, which mandates that the central bank submit its balance sheet, income, expenditure and related details within four months of the end of every fiscal year.

The annual report is categorized into three parts:

NRB’s financial position at the end of Asar 2082 shows assets and liabilities rising to Rs 26 trillion 71.23 billion, up from the previous year’s level. The growth reflects an increase in foreign exchange reserves, domestic investments, government securities and other asset components.

Government to Receive Increased Transfer

NRB spokesperson Guru Paudel said the central bank’s decision to transfer Rs 42 billion to the government reflects stronger earnings and prudent reserve allocation. “The transfer amount has increased by Rs 5 billion compared to the previous fiscal year,” he said.

The government usually utilizes this transfer to support budget financing and expenditure management—making NRB’s annual contribution a crucial fiscal resource.

Liquidity Cost Expected to Rise

Although income increased, NRB highlighted concerns over the rising cost of liquidity operations. With banks experiencing fluctuating liquidity conditions—periods of excess followed by tightening—the central bank has been carrying out large-scale operations to stabilize the financial system.

As the current fiscal year already shows signs of elevated demand for liquidity support, NRB anticipates higher intervention costs in coming months.