6th October 2025, Kathmandu
The Government of Nepal has officially revoked the extended public holidays in the Kathmandu Valley and western regions, which were originally declared due to continuous heavy rainfall and flooding.
NRB and NIA Resume Operations
This decision, driven by improved weather conditions and receding floodwaters, immediately triggers the full resumption of operations across the critical financial and regulatory sectors, effective today, October 6, 2025.
1. Reopening of Apex Financial Regulators
The directive from the government to resume regular operations has an immediate and pronounced impact on the country’s central financial bodies, which are the linchpin of the economy:
Nepal Rastra Bank (NRB) Resumption: As the central bank, NRB’s reopening is the most significant development. NRB is responsible for monetary policy, supervising the entire banking and financial system, and operating critical payment infrastructures like the Real-Time Gross Settlement (RTGS) and payment clearing systems. The central bank’s full functionality ensures the injection of immediate liquidity into the system, facilitates interbank settlements, and normalizes all foreign exchange and public debt management operations that might have been slowed down during the emergency closure. The continuation of these services is paramount to avoiding systemic shock and maintaining public confidence in the financial system.
Nepal Insurance Authority (Beema Pradhikaran) Resumption: The immediate reopening of the Insurance Authority is crucial for managing the impact of the very event that caused the holiday—the floods. The Authority’s personnel will be tasked with providing regulatory oversight for the processing of a likely surge in flood and disaster-related insurance claims. This prompt return to work will help to ensure that claims processing by insurance companies is streamlined, fair, and quick, which is vital for the financial recovery of affected businesses and individuals.
Securities Board of Nepal (SEBON) Resumption: While not explicitly mentioned in the reopening, the prompt indicates that SEBON was also actively notifying its employees to report back to work via SMS, aligning with the return to normalcy. SEBON’s resumption allows for the immediate reopening of the capital market, including the Nepal Stock Exchange (NEPSE). A prolonged closure of the stock market can lead to investor uncertainty and the build-up of unexecuted trades. The timely reopening provides an essential mechanism for price discovery and liquidity, allowing investors to trade and the market to reflect the current economic reality after the weather event.
2. Normalization of Banking and Financial Services
The directive’s most tangible effect for the public and the business community is the resumption of full services by commercial banks, development banks, finance companies, and insurance companies.
Restoration of Essential Banking Services: Banks and Financial Institutions (BFIs) will move beyond the limited essential services they may have provided during the holiday (often mandated by the NRB to include cash transactions and check clearing). The resumption of normal hours means customers can now access a complete range of services, including loan disbursements, international money transfer services, locker services, and the full capacity of customer service departments.
Clearing and Settlement Mechanisms: The clearing houses, which handle a substantial volume of interbank transactions (like cheques and electronic fund transfers), will now operate at full capacity. This prevents a large backlog of payments from accumulating, ensuring that funds owed between businesses and individuals are processed without further delay.
Impact on Businesses and Trade: For businesses in the affected regions, particularly those in the Kathmandu Valley, the resumption of financial services is an immediate lifeline. It allows them to execute pending vendor payments, process payrolls, access working capital, and deposit sales revenues, which is crucial for restoring the flow of commerce and getting supply chains back on track after the disruption.
3. Implications and Market Confidence
The government’s decision to swiftly reverse the holiday reflects a determination to minimize the economic fallout of the natural disaster. While the initial holiday announcement signaled the severity of the flood threat, the subsequent revocation highlights the government’s agility and confidence in the improved situation.
Boosting Business and Investor Confidence: The synchronized return to work by the central bank, insurance regulator, and capital market regulator sends a strong signal of institutional resilience and control. This coordinated effort helps to stabilize market expectations, both domestically and internationally, reducing the perception of prolonged crisis and boosting overall business confidence.
Preventing Economic Backlogs: An unmanaged financial closure, even for a few days, can lead to severe backlogs in corporate and government payments, potentially harming small suppliers and delaying tax revenue collection. The prompt return to operation is a proactive measure to manage this risk, ensuring economic activity can quickly revert to its pre-flood pace.
In summary, the immediate and coordinated resumption of operations across the Nepal Rastra Bank, the Nepal Insurance Authority, the Securities Board of Nepal, and all BFIs is a critical administrative action. It marks the end of the emergency financial shutdown, enables the swift processing of disaster-related financial tasks (like claims), and, most importantly, provides the essential liquidity and payment infrastructure required to rapidly restart commercial activity and manage the economic recovery in the affected regions.
For More: NRB and NIA Resume Operations