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KARACHI: The State Bank of Pakistan (SBP) on Tuesday revised regulations for consumer financing and reduced the financing period for auto financing.
Under the new regulations, the maximum tenure of auto finance has been reduced from five years to three years. This will be applicable for cars above 1000cc.
For vehicles up to 1000cc, the tenure of auto loan has been reduced to five years from seven years.
This step will help to moderate demand growth in the economy, leading to slower import growth which will support the balance of payments.
As per the latest SBP data, automobile financing in Pakistan witnessed a marginal increase of Rs3 billion to Rs367 billion in April 2022.
Read more: SBP hikes policy rate by 150bps to 13.75pc
Earlier, the State Bank of Pakistan (SBP) announced an increase of 150 basis points in the benchmark policy rate, taking it to 13.75 per cent to “maintain the balance between inflation and economic growth”.
“This action, together with much needed fiscal consolidation, should help moderate demand to more sustainable pace while keeping inflation expectations anchored & containing risks to external stability,” the SBP’s Monetary Policy Committee (MPC) said in a statement.