Overview
State Bank of Pakistan has reduced the loan tenure for vehicles. State Bank has cuts-off the tenure by 2 years. Now the vehicles that are allowed for 7 years loan policy are available for 5 years, and 5 years loan is now covered in 3 years. State Bank has taken this step to curb the import of vehicles and vehicles purchased in the country. They revised the conditions for an auto loan and these are:
- The loan tenure for vehicles above 1000cc has been reduced to 3 years from 5 years.
- Vehicles up to 1000cc engine capacity loan tenure reduce from 7 years to 5 years.
The new frame has the designed to control the overloaded expenses to control the import of vehicles and the need for USD currency. According to the State Bank application, the new rules are implemented on all locally assembled vehicles and the bank will make sure it’s implemented on an urgent basis. The new amendments applied on all above 1000cc engines and up to 1000cc engine cars.
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Car Import Ban
The initial step the government has taken was the ban on all used and brand-new cars imported into the country. Government has only one way left to control the high import bills by stopping the entrance of imported items into the country. Nearly 800 items are listed in the ban list.
According to the Information Ministry Maryam Aurangzeb, this is the only way to control the high rising import bills. We have to sacrifice imported products to save our economy. The government can save $500 million per month by cut-down the import.
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CBU Car Import Ban
Completely Built Unit (CBU) car imports are also banned in the country. Only the commercial vehicles are allowed to import because these are the need of our country for food transportation or product delivery to different cities. Luxury vehicles will not be allowed to cross the boundaries of Pakistan.
The ban is also imposed on the vehicles that are reached Karachi Port after 19 May 2022. The government will only clear the vehicles and deliver them to customers that are reached Karachi Port before the deadline date.
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CKD Kits Import Duty Increased
For the locally assembled cars automakers import CKD kits. The government has increased the Regulatory Duty on CKD kits for cars above 1000cc or 1300cc cars from 70 percent to 100 percent. But this decision is still not confirmed by the Ministry so it’s not applicable right now.
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Conclusion
The rising rate of the dollar impacts our cars import. Customers paid customs duty in international currency and the import bills of Pakistan are very high. The ban is the only option left for the government to control the inflation in the country. We can hope the ban on cars import will not affect the demand for vehicles and the government can save the economy.
