KATHMANDU: The government has proposed an interest-free vehicle loan scheme for civil servants, allowing eligible employees to borrow up to Rs 6 million to purchase a vehicle. The loan would be repayable over a maximum period of 20 years, while the government would bear the full interest cost.
The proposal is included in the draft “Vehicle Management Directive for Government Employees, 2083”, prepared by the Office of the Prime Minister and Council of Ministers.
Under the draft, government employees, as well as doctors, health workers and other staff working in government hospitals, would be eligible for subsidized vehicle loans. The loan amount would range from Rs 200,000 to Rs 6 million, depending on the employee’s rank.
Employees have been divided into five categories. Senior officials in the top three categories would be eligible for four-wheelers, while the remaining two categories would receive loans for two-wheelers.
Officials in Category A, including the Chief Secretary, Secretaries and 12th-level officers, could borrow up to Rs 6 million. Category B, which includes Joint Secretaries and 11th-level officers, would be eligible for loans of up to Rs 5 million. Category C, covering Under Secretaries and 9th and 10th-level officers, could receive up to Rs 4 million.
For two-wheelers, Category D employees, including Section Officers and 6th to 8th-level officers, could receive loans of up to Rs 400,000. Category E, which covers non-gazetted and assistant-level staff, would be eligible for loans of up to Rs 200,000.
Employees would be required to make a 20% down payment, while the remaining 80% would be financed through the loan.
The government would pay the interest on the financed amount, but employees would repay the principal through monthly installments.
If an employee purchases a vehicle costing more than the prescribed loan limit, the government would subsidize interest only up to the approved ceiling. Any additional borrowing and related interest would be the employee’s responsibility.
The vehicle must be registered in the employee’s name and used even if the employee is transferred to another government office. Employees receiving this benefit would not be eligible for a separate government vehicle facility.
As the vehicle would remain under the employee’s ownership, all operating expenses, including fuel, maintenance, insurance, servicing and annual renewal, would be borne by the employee.
The loans would be provided through the Employees Provident Fund (EPF), Citizen Investment Trust (CIT), Social Security Fund (SSF) and designated banks.
The draft also states that employees leaving government service before repaying the loan would lose the interest subsidy and would have to pay the remaining interest themselves.
The government has also proposed measures to encourage the purchase of electric vehicles. It plans to work with the Nepal Electricity Authority (NEA) to install EV charging stations at government offices.
According to the draft directive, the policy aims to reduce the government’s vehicle operating costs, improve transparency and efficiency in vehicle management, and encourage a system where employees own and manage their own vehicles instead of relying on government-owned fleets.
