KARACHI: The State Bank of Pakistan (SBP) has also allowed the banks/Development Finance Institutions (DFIs) to extend loans for the cost of ancillary item(s) like CNG kits, vehicle tracking device i.e. Global Positioning System—commonly known as “Tracker” etc. while sanctioning auto loans for the ex-factory tax paid price fixed by the car manufacturers. However, the banks/DFIs are not 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. According to 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% 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 i.e. 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. staff report
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