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A delegation led by NADA Automobiles Association of Nepal (NADA), President Karan Chaudhary met with the Honorable Deputy Prime Minister and Finance Minister, Bishnu Prasad Paudel, to discuss various issues in the automobile sector.
During the meeting, President Chaudhary called for policy reforms to revitalize Nepal's automobile industry, which has been experiencing a slowdown. He presented 22 suggestions from NADA, which were also submitted in writing.
One of the key suggestions was to increase the loan-to-value ratio for Hire Purchase Loans from banks for petrol and diesel vehicles from the current limit of 50% to 75%.
After the implementation of the current loan guidance directive 2079, various steps have been taken by the Nepal Rastra Bank to enforce this directive. However, it still causes problems for businessmen, and it is advised to implement this directive only for those who have taken loans after its issuance.
Since blacklisted individuals continue their operations through other banks and face lenient actions, Nepal Rastra Bank must enforce this rule rigorously. Additionally, Nepal Rastra Bank needs to differentiate between privately used vehicles and commercially significant ones powered by petrol, diesel, and electric, adjusting bank investments accordingly. Moreover, sectors with an NPA of 55 should not receive financing.Household income, typically utilized by its members such as couples, should factor into calculating the repayment capacity of auto loan borrowers. Therefore, for real estate purchases, the Debt Service to Gross Income Ratio should be simplified and maintained at 70 percent, up from the current 50 percent, based on payment verification. Furthermore, Nepal Rastra Bank must categorize ICE vehicles based on private and commercial categories.
After the discussion, Honorable Deputy Prime Minister and Finance Minister Paudel expressed interest in the various policy suggestions from NADA and assured that the government would consider the necessary steps.
The discussion was also attended by NADA's outgoing president, Dr. Dhruba Thapa, senior vice president Akash Golchha, secretary Vikram Singhania, treasurer Milan Babu Malla, co-treasurer Pankaj Agarwal, and association secretary Surendra Pradhan.
