Highlights

• Nepal Rastra Bank has announced a policy to ease financing for large electric public transport vehicles.
• The announcement came alongside the Monetary Policy for FY 2083/84 unveiled by Governor Dr. Bishwanath Paudel.
• The central bank will introduce a special Loan to Value (LTV) policy for electric vehicles used as public transport.
• The existing 60 percent LTV ratio remains unchanged for private vehicles.
• The exact revised financing limit for public EVs will be confirmed through a future NRB circular.
• The move supports the government's push to expand the use of large electric buses across Nepal.
• Industry stakeholders have long argued for restoring the previous 80 percent LTV ratio for EV financing.

NRB Targets Easier Financing for Public Electric Transport

Nepal Rastra Bank has taken another step toward supporting Nepal's electric mobility ambitions, announcing plans to make financing easier for large electric vehicles used in public transportation. The measure forms part of the country's Monetary Policy for the fiscal year 2083/84, unveiled on Tuesday by Governor Dr. Bishwanath Paudel.

While the announcement does not immediately change lending rules, it signals that commercial banks and financial institutions will soon receive updated guidance allowing more favorable financing for eligible public transport EVs. The implications extend far beyond the banking sector. Lower upfront capital requirements could encourage transport operators to replace diesel fleets with electric alternatives more quickly.

What Will Change Under the New Policy?

The centerpiece of the announcement is a commitment to introduce a special policy framework for the Loan to Value (LTV) ratio applicable to large electric public transport vehicles.

Today, banks can finance up to 60 percent of the purchase price for all categories of vehicles. Buyers are required to contribute the remaining 40 percent as a down payment.

Policy Area	Current Rule	Future Direction
Private Vehicles	60% Loan to Value ratio	No announced change
Large Electric Public Vehicles	60% Loan to Value ratio	Special policy with eased financing, exact ratio yet to be announced

The monetary policy does not specify the revised percentage. Instead, the central bank says detailed implementation will follow through an official circular. That detail matters because transport operators are waiting to see just how much financing flexibility will actually be provided.

Government Push for Electric Buses Gains Financial Support

The timing is particularly significant given Nepal's broader transport strategy. The government has already identified large electric buses as a priority for the future of public transportation, aiming to reduce fuel imports, improve urban air quality and encourage cleaner mobility.

The central bank's decision aligns financial policy with that broader objective. Access to affordable credit has remained one of the biggest barriers for operators considering electric fleets, especially because large buses require substantial upfront investment.

• Reduced initial financial burden for transport operators.
• Greater access to bank financing for fleet purchases.
• Support for cleaner public transportation across Nepal.
• Closer alignment between monetary policy and national EV goals.

For consumers, the change could be substantial. Easier financing for operators may eventually accelerate the introduction of cleaner buses into daily public transport services.

The Industry Wanted Higher Lending Limits

This announcement also revives a debate that has continued for several years.

Previously, electric vehicles benefited from an 80 percent Loan to Value ratio, allowing buyers to finance a much larger share of the purchase price. That provision was later tightened, bringing EV financing in line with other vehicle categories at 60 percent.

Loan to Value Timeline	LTV Ratio	Status
Previous EV Financing Policy	80%	Earlier provision
Current Vehicle Financing Rule	60%	Currently applicable
Upcoming Public EV Policy	To be announced	Awaiting NRB circular

Automobile businesses and EV stakeholders have consistently urged regulators to restore the previous 80 percent financing limit, arguing that high down payment requirements have slowed adoption.

Whether the new framework reaches that level remains unknown. The real challenge isn't cost, it's execution. Everything now depends on the detailed circular that will define the new lending parameters.

Why the Next Circular Matters

The announcement establishes the policy direction but leaves one critical question unanswered, the final Loan to Value ratio for public electric transport vehicles.

Until the implementation circular is released, banks will continue operating under the existing lending framework. Operators planning fleet purchases are therefore likely to wait before making major investment decisions.

While the change may appear incremental, its long-term impact could be considerable. If the revised financing rules significantly reduce upfront costs, Nepal's transition toward electric public transportation could gather pace over the coming years.

Frequently Asked Questions

Q: Has Nepal Rastra Bank increased the Loan to Value ratio for public electric buses?
A: Not yet. The monetary policy announces that the ratio will be eased through a special policy, but the exact percentage will be confirmed in a future NRB circular.

Q: Does the new policy apply to private electric cars?
A: No. The monetary policy does not announce any changes for private vehicles. They remain under the existing 60 percent Loan to Value rule.

Q: What is the current Loan to Value ratio for vehicle financing?
A: Banks and financial institutions can currently finance up to 60 percent of a vehicle's value, while buyers must arrange the remaining 40 percent as a down payment.

Q: Why is this policy important for Nepal's EV market?
A: Easier financing can lower the initial investment required for transport operators, making it easier to adopt large electric buses and support the government's clean mobility goals.

Q: Was the Loan to Value ratio for EVs higher in the past?
A: Yes. Electric vehicles previously benefited from an 80 percent Loan to Value ratio before the limit was reduced to 60 percent.