Kathmandu-The Supreme Court has halted the rule that required banks and financial institutions to sell non-banking assets within three years.

The court also stopped the rule that forced banks to seek government approval if the assets were not sold within that period.

This opens the way for banks to dispose of non-banking assets without government approval.

The constitutional bench issued an interim order to the government. The order stops the implementation of the amended Section 12, Clause g of the Land Act, 1964. The provision was added through the Investment Facilitation Amendment Act in 2024.

The government had published the notice adding Section 12, Clause g to the Land Act on July 8, 2024.

The provision required banks, financial institutions and cooperatives to sell collateralized land taken into their name within three years. If they could not sell it, they had to seek approval from the government.

The Confederation of Banks and Financial Institutions Nepal filed a writ petition. It argued that the rule violated the right to property guaranteed under Articles 17(2)(c) and 25 of the Constitution. The petition requested the court to scrap the provision.

The court said banks face direct investment risk if they cannot sell non-banking assets after three years without government approval. The court noted a constitutional question on the right to property, so it issued an interim order to stop implementation until the final hearing.

The court stated that forcing banks to keep non-banking assets beyond three years could create irreversible loss. The court said loan recovery could become difficult and financial stability could weaken.

The interim order reduces pressure on banks. The sector has been struggling with slow loan recovery and weak demand. Banks said the rule would have allowed the state to influence their assets through the approval process.

The final decision will determine the legal status of non-banking assets that banks take over through collateral auction.

Non-banking assets cross Rs 51 billion

As of mid October 2025, non-banking assets of banks and financial institutions reached Rs 51.12 billion.
Commercial banks hold the largest share with Rs 43.24 billion, while Development banks hold Rs 4.84 billion and Finance companies hold Rs 3.03 billion respectively

Commercial banks and their NBA

Global IME Bank: Rs 6.05 billion
Himalayan Bank: Rs 5.93 billion
NIC Asia Bank: Rs 4.46 billion
Prime Bank: Rs 4.25 billion
Nepal Investment Mega Bank: Rs 3.87 billion
Nabil Bank: Rs 3.45 billion
Kumari Bank: Rs 2.52 billion
Laxmi Sunrise Bank: Rs 2.19 billion
NMB Bank: Rs 1.77 billion
Prabhu Bank: Rs 1.68 billion
Agriculture Development Bank: Rs 1.34 billion
Citizens Bank: Rs 1.26 billion
Sanima Bank: Rs 1.03 billion
Nepal SBI Bank: Rs 950million
Siddhartha Bank: Rs 772 million
Machhapuchchhre Bank: Rs 600million
Everest Bank: Rs 538 million
Nepal Bank: Rs 264 million
Rastriya Banijya Bank: Rs 250 million

Development banks
Jyoti Bikas Bank: Rs 1.07 billion
Garima Bikas Bank: Rs 682 million
Mahalaxmi Bikas Bank: Rs 582 million
Sangrila Development Bank: Rs 528 million
Muktinath Bikas Bank: Rs 413 million
Kamana Sewa Bikas Bank: Rs 344 million
Lumbini Bikas Bank: Rs 265 million
Excel Development Bank: Rs 263 million
Saptakoshi Development Bank: Rs 249 million
Shine Resunga Development Bank: Rs 151 million
Corporate Development Bank: Rs 110million
Sindhu Bikas Bank: Rs 62 million
Karnali Development Bank: Rs 61 million
Narayani Development Bank: Rs 36 million
Miteri Development Bank: Rs 83 million
Green Development Bank: Rs 51 million
Salpa Development Bank: Rs 45 million

Finance companies
Goodwill Finance: Rs 522 million
Gorkhas Finance: Rs 480million
Pokhara Finance: Rs 414 million
Progressive Finance: Rs 251 million
Best Finance: Rs 220million
Reliance Finance: Rs 210 million
Nepal Finance: Rs 179  million
Samriddhi Finance: Rs 173 million
Guheshwori Merchant Finance: Rs 158 million
Janaki Finance: Rs 131million
Manjushree Finance: Rs 100million
Central Finance: Rs 83 million
ICFC Finance:  Rs 50million
Multipurpose Finance:  Rs 25 million
Capital Merchant Finance: Rs 20million
Shree Investment Finance: Rs 15 million