Concerns over Nepal’s growing dependence on foreign employment have resurfaced as policymakers warn of long-term risks to the country’s labor force. The Ministry of Finance, in its recent Current Economic Situation Report, has highlighted the possibility of a future decline in domestic manpower. At present, Nepal faces a severe shortage of employment opportunities at home, particularly for skilled workers. Many institutions continue to struggle to recruit qualified personnel, reflecting a widening gap between labor supply and demand. A prevailing perception that foreign employment is the only viable option has further deepened the challenge. As a result, many individuals opt for low-skilled jobs abroad rather than investing in skill development at home. Even for such roles, basic formal education is often required. Social influence also plays a role, with migration decisions frequently shaped by the experiences of neighbors and relatives working overseas.
While some domestic employment opportunities exist, they remain limited. The state continues to be the largest employer, primarily through the civil service, security forces, and public institutions. However, these opportunities are insufficient to absorb the growing workforce. Inefficiencies in public institutions and the competitive nature of recruitment—particularly through the Public Service Commission—further restrict access to stable employment. According to the Nepal Living Standards Survey, the country’s unemployment rate stands at 12.6 percent. With limited domestic options, many citizens are compelled to seek work abroad to sustain their livelihoods. Over the past decade, foreign employment has grown at an average annual rate of 28.6 percent. In the fiscal year 2081/82, a total of 839,000 workers obtained labor permits, including both new and renewed applications. Such figures underscore the scale of labor migration from a country with a relatively small population. Experts argue that a shift toward skill-based migration and domestic job creation could significantly alter this trajectory.
‘Remittance will be used for capital formation now’
Despite the economic relief provided by remittances, which support household consumption, education, and healthcare, the social and economic costs are becoming increasingly visible. Agricultural land is increasingly left uncultivated, and shortages of labor are affecting local productivity and infrastructure development. Analysts warn that if current trends continue, Nepal’s development projects could face further delays due to manpower shortages. Strengthening domestic industries and generating sustainable employment opportunities is seen as essential to reversing the dependence on foreign labor. The current administration, led by Mayor Balen Shah, had pledged during its electoral campaign to reduce outward labor migration and focus on long-term domestic solutions.
SC repeals mandatory rule for BFIs to sell non-banking assets within three years
KATHMANDU, May 6: Banks and financial institutions (BFIs) have received relief from a long-standing obligation to dispose of their non-banking assets within three years, following a landmark verdict by the Supreme Court (SC).
A five-member Constitutional Bench led by Acting Chief Justice Sapana Malla Pradhan, along with Justices Kumar Regmi, Hari Prasad Phuyal, Manoj Kumar Sharma, and Nahakul Subedi, issued the order on Monday. The ruling came in response to a writ petition filed by advocate Sagar Adhikari on behalf of the Confederation of Banks and Financial Institutions Nepal (CBFIN). The bench declared the provision unconstitutional and directed the issuance of the writ petition.
Previously, BFIs were compelled to sell non-banking assets—properties seized as collateral during loan recovery—within three years. If sales were not completed within the stipulated period, institutions were required to seek government approval for extensions. The apex court has now repealed this requirement, removing what bankers described as a cumbersome and impractical restriction.
Non-banking assets typically consist of fixed properties pledged by borrowers, which banks auction when loans turn into bad debt. The proceeds from such auctions allow banks to offset provisioning amounts set aside for bad loans. However, a growing volume of non-banking assets has been seen as a sign of rising risks in asset management and increasing defaults in the financial sector.
In December last year, the SC had already issued an interim order against the government’s enforcement of the rule, signaling its concerns over the provision. Monday’s final verdict now provides BFIs with greater flexibility in managing collateral properties without the pressure of a strict timeline.
According to bankers, the decision offers much-needed respite at a time when institutions are grappling with mounting non-performing loans. Nepal Rastra Bank data shows that non-banking assets of BFIs surged to Rs 50.55 billion in the last fiscal year, with commercial banks alone accounting for Rs 42.11 billion. As of now, the figure has climbed further to Rs 51.33 billion.
Industry insiders argue that the SC’s ruling will help stabilize the sector by allowing banks to manage collateral properties more strategically, rather than rushing sales under unfavorable market conditions. They believe the move will ease operational challenges and provide breathing space for institutions struggling with loan recovery amid economic slowdown.
The verdict is expected to have far-reaching implications for the financial sector, reshaping how BFIs handle distressed assets and reinforcing judicial oversight in economic policymaking.
