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State Bank Reduces Auto Financing Loan Tenure

State Bank of Pakistan (SBP) has reduced the consumer financing tenure for vehicles as the country battles a bulging import bill. According to notification, the financing tenure has been brought down to a maximum of 3 years for cars with engine displacement of over 1,000cc, and to 5 years for those under 1,000cc.

As per the circular, SBP decided to make the following amendment to Prudential Regulations for Consumer Financing (PRCF):

“The maximum tenure of auto finance facility is reduced from five (5) years to three (3) years for vehicles above 1,000 cc engine displacement and from seven (7) years to five (5) years for vehicles up to 1,000 cc engine displacement.” 

Related: Car Financing Costs will Haunt You

The central bank further said that other amendments issued earlier in September 2021, will henceforth be applicable on financing for all locally assembled/manufactured vehicles, including on financing for vehicles of up to 1,000 cc engine displacement and locally assembled/manufactured electric vehicles. However, the regulatory treatment of Roshan Apni Car product communicated earlier to RDA participant banks will continue to remain effective.

Full story: Business Recorder

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