𝗨𝗽𝗱𝗮𝘁𝗲𝘀 𝗳𝗿𝗼𝗺 𝗦𝘁𝗮𝘁𝗲 𝗕𝗮𝗻𝗸 𝗢𝗳 𝗣𝗮𝗸𝗶𝘀𝘁𝗮𝗻 ❞ 𝗔𝘂𝘁𝗼 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴 ❞
State of Bank has announced new/ revised Prudential Regulations for Consumer Financing (PRCF) . Below are some salient features related to Auto loans.
The total monthly amortization payments of consumer financing facilities, as prescribed in paragraph 1 of the regulation, should not exceed 40% of the net disposal income of the prospective borrower. Similarly, in paragraph 3 of the regulation Debt Burden Ratio for Consumer Financing may be read as 40 percent instead of 50 percent.
The maximum tenure of the auto finance facility is reduced from seven (7) years to five (5) years.
The minimum down payment is increased from 15 percent to 30 percent of the value of vehicle.
Overall auto loans/financing limits availed by one person from all banks/DFIs, in aggregate, shall not exceed Rs3,000,000/-, at any point in time. However, the financing limit of borrowers whose approved limit already exceeds Rs3,000,000/- may be amortized as per existing terms and the same shall not be further increased.
𝗡𝗲𝘄 𝗮𝘀 𝘄𝗲𝗹𝗹 𝗮𝘀 𝘂𝘀𝗲𝗱 𝗶𝗺𝗽𝗼𝗿𝘁𝗲𝗱 shall not be eligible for auto financing from banks/DFIs.
The aforesaid amendments in PRCF will not apply on ;
Financing for locally assembled/manufactured vehicles of up-to 1000cc engine capacity.
Roshan Apni Car product of banks and
Locally assembled/manufactured Electric Vehicles. Accordingly, these financings will continue to be governed by PRCF existing prior to these amendments. Besides, the regulatory treatment of Roshan Apni Car product already communicated to RDA participant banks will continue to remain effective.
The above amendments in PRCF shall be applicable, with immediate effect, on new financing facilities. All other instructions on the subject shall, however, remain unchanged.
SOURCE: https://www.sbp.org.pk/bprd/2021/CL29.htm
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