Nepal Rastra Bank’s policy to encourage banks and financial institutions to expand the limit of auto loans has continued to stay at the existing 50 percent of the valuation of a private vehicle.
Unveiling its monetary policy for the fiscal year 2077/78 in the capital today, the central bank said that the limitation on vehicle and auto hire purchase loans will be the same as last year, i.e., a person buying a private vehicle will have to make a down payment of at least 50 percent of the vehicle price. NRB has barred banks and financial institutions from extending auto loans that amount to more than 50 percent of the vehicle’s price.
Although auto dealers in the country have been voicing their opinions over the stringent monetary policy in recent years, the central bank has hinted at the shortage of lendable funds as a reason for tightening the cap on auto loans.
The Government of Nepal has set a target of 7 percent economic growth in the budget of the Fiscal Year 2077/78. To bring the economy back from COVID-19, the government has adopted a policy to encourage credit investment in domestic, small, and medium enterprises in the agriculture, energy, and tourism sector.