Kathmandu: Nepal’s automobile sector is voicing strong discontent with the Nepal Rastra Bank’s (NRB) monetary policy for the fiscal year 2024/25. The NADA Automobiles Association of Nepal reports a 68 percent market decline, attributing the drop to unsupportive policies amid an economic slowdown.
The Association claims that their recommendations for policy changes have been ignored. They warn that the situation could worsen, potentially driving entrepreneurs out of business.
A major concern is Article 79 (B) of the policy, which prevents blacklisting of construction businesses for fraudulent cheques until new credit information provisions are established. The automobile sector fears this could lead to bad loans for businesses selling equipment and parts on credit.
NADA has proposed raising the loan-to-value ratio from 50 percent to 75 percent for vehicle loans and clearer investment guidelines for different vehicle types. They also criticize the NRB’s leniency towards blacklisted individuals and companies.
Additionally, the NRB has increased the required loan payment income ratio for real estate from 50 percent to 70 percent, impacting loan eligibility for property purchases.