KATHMANDU, May 23: Karan Chaudhary, president of NADA Automobiles Association of Nepal, led a delegation that met newly appointed Nepal Rastra Bank (NRB) Governor Dr Bishwa Nath Paudel.
During Friday's meeting, the NADA delegation discussed key issues concerning Nepal's monetary policy and the automobile sector with Governor Dr. Bishwanath Paudel. President Karan Chaudhary presented five major recommendations to improve the overall condition of Nepal's automobile industry.
In a press release, NADA stated that the discussion focused on the lack of financial access, practical hurdles in obtaining loans for electric and premium vehicles, inconsistencies in loan policies, and the need for regulatory reforms to ensure a fair financial system.
Although NRB opened auto loans a year ago, banks have yet to resume loan disbursement in practice. NADA argued that the delay has impacted the entire automobile industry and called for clear directives and immediate implementation.
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NADA urged Governor Paudel to increase the loan-to-value (LTV) ratio to at least 70 percent.
"The current 50 percent LTV cap has created barriers for both customers and businesses. We urged the Governor to raise the LTV ratio to a more realistic level across all automobile segments," NADA stated in its press release.
NADA emphasized the need to introduce practical flexibility in the current strict Debt Service to Gross Income Ratio (DSR) policy, pointing out that it has made it difficult for middle-class and salaried customers to obtain loans. NADA also urged the government to launch targeted loan schemes for electric and hybrid vehicles.
NADA stated, "To support the country's sustainable energy and environmental goals, we recommend introducing special loan facilities, refinancing options, and incentive programs for electric and hybrid vehicles."
NADA further demanded that regulators enforce stricter rules to ensure fairness in the financial system. It urged NRB to stop practices that pressure customers to take loans only from dealer-affiliated banks or that restrict competition among financial institutions.
During the discussion, President Chaudhary emphasized that Nepal's revenue, employment, technology transfer, and sustainable development goals directly depend on the automobile industry. He stressed the need to balance policy, finance, and practice to strengthen the industry.
Similarly, NADA Vice President Rajan Babu Shrestha proposed that NADA organize an interaction program with NRB's support to formulate long-term economic policies.
Governor Paudel assured that he would take NADA's suggestions seriously. He promised to discuss the necessary issues and coordinate effectively.
