NADA forwards five-point recommendations to NRB

KATHMANDU, MAY 23: A delegation led by Karan Chaudhary, President of the NADA Automobiles Association of Nepal, met with the newly appointed Governor of Nepal Rastra Bank (NRB), Dr. Baikuntha Poudel, to hold detailed discussions on various issues concerning the automobile sector within Nepal's monetary policy framework.

During the meeting, President Chaudhary presented a five-point recommendations aimed at the overall improvement of Nepal’s automobile industry. The discussion primarily focused on the lack of financial access, practical barriers to loans for electric and hybrid vehicles, inconsistencies in lending policies, and the need for regulatory reforms to ensure fairness in the financial system.

The key recommendations presented by NADA are as follows:

1. Practical Implementation of auto loans for automobile Sector
Although NRB decided to allow auto loans over a year ago, such lending has yet to be implemented in practice by the banks. This ongoing restriction continues to affect the entire industry. NADA called for immediate clarity and enforcement of the decision.

2. Raise the Loan-to-Value (LTV) ratio to a minimum of 70%
The current LTV limit of 50% has created barriers for both consumers and businesses. NADA urged that this ratio be raised to a more realistic level across all automobile segments.

3. Introduce flexibility in the Debt Service to Gross Income Ratio (DSR)
The current rigid DSR policy has made it difficult for middle-income and salaried individuals to access loans. NADA emphasized the need for a more practical and flexible approach.

4. Launch targeted loan programs for electric and hybrid vehicles
In support of the country’s sustainable energy and environmental goals, NADA recommended the introduction of special loan schemes, refinancing options, and incentive programs for electric and hybrid vehicles.

5. Strengthen regulations to ensure fairness in the financial system
NADA called on NRB to enforce stricter regulations to prevent practices such as compelling customers to obtain loans only through specific dealer-affiliated banks or obstructing access to competitors, thereby ensuring a fair financial environment.

 

During the meeting, President Chaudhary underscored that the automobile industry is directly linked to Nepal's revenue generation, employment, technology transfer, and sustainable development goals. He stressed the need to strike a balance between policy, finance, and practice to strengthen the sector.

NADA Vice President Rajan Babu Shrestha also proposed that NADA, with support from NRB, host an interactive session focused on shaping long-term economic policies for the industry.

At the conclusion of the meeting, Governor Dr. Poudel expressed his commitment to seriously consider NADA’s recommendations and assured that further discussions and coordination would take place on relevant issues.

Also present at the meeting were NADA Secretary Bikram Singhania, Treasurer Milan Babu Mall, Joint Treasurer Pankaj Agrawal, and Central Executive Committee Members Yamuna Shrestha and Dipendra Kumar Mishra.