Chairman of Chamber of Small traders Khalid Mehmood Qureshi has hailed the decision of the State Bank of Pakistan (SBP) to allow the banks/Development Finance Institutions (DFIs) to extend loans for the cost of ancillary item(s) like CNG kits, vehicle tracking device, ie Global Positioning System-commonly known as "Tracker" etc, while sanctioning auto loans for the ex-factory tax paid price fixed by the car manufacturers.
He said that the banks/DFIs should also be permitted to finance the premium charged by the dealers and/or investors over and above the ex-factory tax paid price of cars/vehicles, fixed by the manufacturers. He said in a press statement that it is a good decision, which would help in purchase of ancillary items. It may be recalled that a circular (BPRD Circular No 06) issued Wednesday, the Regulation R-11 of the Prudential Regulations for Consumer Financing has been substituted with the following:
"While allowing auto loans, the banks/DFIs shall ensure that the minimum down payment does not fall below 10 percent of the value of the car/vehicle. Furthermore, the banks/DFIs may extend auto loans for the ex-factory tax paid price fixed by the manufacturers and the cost of ancillary item(s) (like CNG kits, vehicle tracking device, ie Global Positioning System-commonly known as "Tracker" etc) desired by the borrower to be fitted in the car/vehicle.
However, the banks/DFIs shall not finance the premium charged by the dealers and/or investors over and above the ex-factory tax paid price of cars/vehicles, fixed by the manufacturers." The amendments in Regulation R-11 have been made in the light of the feedback received from banks/DFIs.
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