The vehicle dealers staged a dharna at Maitighar Mandla. On Thursday, in the event of NADA Automobiles Association of Nepal, the auto businessmen said that although the import of vehicles has been opened, there is no environment to sell vehicles due to the policy of the National Bank.
They have also demanded the government to bring businessmen-friendly policy. He also warned that the protest will continue until the demands put forward by the auto traders are met by the government and the National Bank.
Dhruv Thapa, president of NADA Automobiles Association of Nepal, said in the dharna program that although vehicles are open to import, the margin should be removed as 50 percent cash margin is still maintained for import of LC open vehicles.
He said that the auto businessmen have been hit by the provision of 50% margin and only 50% financing even though the import of vehicles has been opened.
Even though the government has decided to allow the import of vehicles, he also said that all the regulations that were implemented before the ban should be removed. He complains that even though Sarka has opened the import of cars, no one will buy a car at the current bank interest rate.
Chairman Thapa said that the interest rate is high and the vehicle will not be sold if only 50 percent financing is available. He said that although the import is open, it is not possible to bring the vehicle immediately.
President Thapa warned that if the government does not address the demands of the auto dealers during the peaceful sit-in and pressure country program, they will stage further protests. He said that NADA had started a phased movement for the rights of auto dealers.
He said that due to the inability of the government to make a policy that is friendly to auto dealers, the dealers who should be in the car showrooms have to come to the streets.
He complained that the policies made by the National Bank were not suitable for businessmen to do business, and they did not provide an environment to do business where there were problems such as lack of liquidity in the market and increase in interest rates.
The National Bank has increased the risk weighting in auto sector loans to 150 percent. Businessmen have demanded that 75 percent should be maintained as before. In order to revive the automobile business, which has been stalled for a long time due to the covid-19 and import restrictions, auto businessmen are demanding that special concessions on loans and interest rates should be arranged.
They also demand that the Current Capital Loan Guidelines, 2079 issued by Nepal Rastra Bank be postponed for the time being. A demand has also been put forward to bring the system of opening a letter of credit with 100 percent cash margin and 50 percent cash margin.
There is also a demand that the CD ratio should be reviewed to ease the lack of liquidity of the banks, the payment period for the delivery order (DO) issued after the vehicle hire purchase loan is approved by the banks should be done within one week after the vehicle is named in the name of the bank.
In the process of disbursing private vehicle hire purchase loans from banks, the current limit of loan to value ratio should be increased from 50 percent to 70 percent. And there is a demand for special concessions in interest rates.
Businessmen protested by carrying placards with slogans such as ‘Whoever pays taxes gets paid, banks insult them, when will the government reduce interest rates’.
