NADA Nepal Meeting with NRB Governor: Auto Loan Policy Reforms & Industry Challenges
23rd May 2025, Kathmandu
A delegation from the NADA Automobiles Association of Nepal, led by President Karan Chaudhary, met with Nepal Rastra Bank (NRB) Governor Dr. Biswo Nath Paudel. They discussed key challenges facing Nepal’s automobile industry and urged the central bank to act on five major policy recommendations.
NADA Nepal Meeting NRB Governor
Focus on Monetary Policy and Auto Sector Needs
The meeting aimed to bridge the gaps between Nepal’s monetary policy and the auto industry’s practical realities. President Chaudhary highlighted that despite policy announcements, auto businesses still face serious barriers when accessing financial services.
The discussion centered around limited access to loans, policy inconsistencies, and regulatory issues. The delegation emphasized the need for quick and practical solutions.
Five Key Demands Presented
During the meeting, NADA presented a five-point reform plan. These proposals focus on making auto loans more accessible and fairer for both customers and businesses.
Ensure the Practical Implementation of Auto Loans
Although NRB lifted restrictions on auto loans a year ago, banks still hesitate to disburse loans. This has stalled growth in the auto sector. NADA urged NRB to issue clear instructions to banks and enforce the policy.
Chaudhary stressed that without real access to financing, the entire automobile market will continue to struggle.
Raise the Loan-to-Value (LTV) Ratio to 70%
NADA called for the current 50% LTV cap to be increased to at least 70%. The existing limit prevents many customers from affording vehicles, especially in the mid-range segment.
By raising the LTV ratio, NADA believes more customers will qualify for loans, which would boost vehicle sales and overall market activity.
Make Debt-Service-to-Income Ratio Flexible
The current Debt-Service-to-Income (DSR) rule is too strict. It blocks many middle-class and salaried individuals from getting loans.
NADA proposed that NRB introduce flexibility in DSR calculation. This would allow financial institutions to assess loans based on real-world income patterns and customer profiles.
Introduce Special Loan Schemes for EVs and Hybrids
Nepal has set ambitious environmental goals. To support this, NADA asked NRB to introduce targeted loans for electric and hybrid vehicles.
These schemes should include refinancing options and special interest rates. NADA believes this move will help Nepal shift to cleaner energy in the transportation sector.
Ensure Fairness in the Financial System
NADA raised concerns about customers being forced to take loans only from specific banks linked to certain dealers. This limits competition and customer choice.
The delegation urged NRB to regulate such practices strictly. They asked the central bank to ensure fair access to all financial institutions across the market.
Automobile Industry Supports National Goals
President Chaudhary reminded the Governor that the automobile industry directly contributes to national revenue, job creation, and technological growth.
He said the sector plays a role in achieving the country’s long-term development goals. Therefore, financial and regulatory support is essential.
To make the industry stronger, he added, policies, finance, and market behavior must work in harmony.
Call for Broader Economic Dialogue
NADA Vice President Rajan Babu Shrestha proposed organizing a policy interaction program in collaboration with NRB. The goal would be to develop long-term economic strategies related to the auto industry.
This event could serve as a platform to bring together financial institutions, government representatives, and auto dealers for policy alignment.
Governor Paudel Responds Positively
NRB Governor Dr. Biswo Nath Paudel welcomed the suggestions. He assured the delegation that the bank would study the recommendations carefully.
He also promised to coordinate with stakeholders to find solutions that work for both the financial and industrial sectors.
Key Officials in Attendance
The NADA delegation included several key members:
Vikram Singhania, General Secretary
Milan Babu Mall, Treasurer
Pankaj Agrawal, Joint Treasurer
Yamuna Shrestha and Dipendra Kumar Mishra, Central Committee Members
Their presence reflected strong support from NADA’s executive body.
Looking Ahead
This meeting signals a potential turning point for Nepal’s auto industry. NADA’s proposals target some of the most pressing issues holding the sector back.
If implemented, the reforms could unlock new opportunities for customers, boost green mobility, and increase economic activity.
Both NADA and NRB agreed that continued dialogue and cooperation are crucial in shaping a future-ready financial and automobile system.
For more: NADA Nepal Meeting NRB Governor
