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NRB Tightened 'Auto Loan' without Study: NADA

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NRB Tightened 'Auto Loan' without Study: NADA
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February 28: Automobile dealers have slammed the recent move of Nepal Rastra Bank of restricting auto loan provided by banks and financial institutions (BFIs). As per them, auto market contributes 40 per cent of the nation's total revenue and is of lower risk.   The traders, criticising NRB for tightening the sector having no default, will be soon holding discussion with NRB regarding matter.

According to Shekhar Golchha, Vice-President of Federation of Nepalese Industries and Commerce and Former President of NADA Automobiles Association "NRB has brought the policy without detail study. The discussion is being held in a bid to inform NRB about the facts of auto market. He added, "NADA has alerted NRB on consequences of the decision. It mentioned the fact that the decision will ultimately affect the BFIs negatively as billions of investments are in risk. Moreover, the decision will also cause loss of hundreds of thousands employment and decline in national revenue as well."

Recently, NRB tightened auto loan provided by BFIs under which BFIs have been barred from providing more than 50 per cent loan of total valuation of the vehicle. The NRB directive has been criticised by the auto dealers. NADA, the association of automobiles dealers of the nation has condemned the NRB decision as ridiculous.  "Nation cannot be built by ignoring the sector that contributes hundreds of billions of investment, millions of employment, important source of revenue and major investment sectors of banking and insurance," said NADA denouncing the NRB step. 

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