KATHMANDU: Nepal Rastra Bank (Nepal’s central bank) has tightened loan regulations for electric vehicles (EVs), reducing the maximum loan-to-value (LTV) ratio to 60%, down from the previous 80%. The new policy, announced in the mid-term review of the monetary policy on Tuesday, requires EV buyers to make a 40% down payment, compared to 20% previously.

The revised rules also increase the LTV ratio for fossil-fuel-powered vehicles from 50% to 60%, providing some relief to internal combustion engine (ICE) vehicle sellers who had long lobbied for such changes.

The policy shift is expected to impact EV sales, as consumers will now need to pay a higher upfront cost. It may also slow down the introduction of new EV brands and models in Nepal. Meanwhile, ICE vehicle dealers stand to benefit from the more lenient loan provisions.

The move signals Nepal Rastra Bank’s (NRB) attempt to balance the auto loan market, encouraging a broader approach to vehicle financing while tightening credit availability for EVs.