NAIMA submits recommendations on monetary policy for upcoming FY to NRB
KATHMANDU: Nepal Automobile Importers and Manufacturers Association (NAIMA) has submitted recommendations on the monetary policy for upcoming fiscal year to Nepal Rastra Bank (NRB), aimed at supporting and expanding the country’s mobility sector.
On the occasion, representatives from NAIMA congratulated newly appointed NRB Governor, Dr Biswo Nath Poudel, and wished him success on Wednesday in steering the institution towards further economic stability and growth.
Meanwhile, the recommendations are designed to address the specific needs of both the electric and internal combustion engine (ICE) vehicle sectors and are intended to facilitate greater consumer access and market expansion.
NAIMA has urged an adjustment to the current loan-to-value ratio. The proposal includes maintaining 80%-20% ratio for all vehicle types, which the association believes will help citizens secure loans more easily and support the nation’s broader economic objectives.
Further, NAIMA called for a review of the existing regulations concerning the issuance of letters of credit (LCs) in Chinese yuan. At present, only vehicles manufactured by Chinese companies in China are eligible for yuan-based LCs. NAIMA stated that, given today’s global business practices, where companies often operate under tripartite agreements regardless of national origin, the rules should be amended to permit importers to open LCs in yuan when Chinese products are produced and shipped from China, irrespective of the beneficiary’s country of origin.
Another proposal involves reducing the risk-weighted asset ratio for vehicle loans from 100% to 75%. Citing the strong value retention and resale potential of vehicles, NAIMA contends that this change would ease loan acquisition, strengthen the automobile market and ensure financial security. The association mentioned that vehicle loans have consistently demonstrated lower default rates compared with other types of loans.
NAIMA’s suggestions are seen as an effort to empower Nepal’s automobile sector and contribute to policy-making that supports sustainable economic growth and the development of modern mobility infrastructure.
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