December 08, 2022

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Niti Aayog gives proposal to RBI for electric vehicles purchase loans 

Niti Aayog proposal to RBI

Niti Aayog gives proposal to RBI for electric vehicles purchase loans 

For the faster adoption of electric vehicles in the country, the Reserve Bank of India is considering a proposal from the government’s policy think tank Niti Aayog to categorise loans to purchase electric vehicles under the priority sector lending (PSL) segment. Read further to know more about Niti Aayog proposal to RBI. 

The Union Minister for Transport Nitin Gadkari recently said the cost of electric vehicles would come down over the next couple of years. In that regard, the Niti Aayog has brought a proposal.

The Niti Aayog chief executive Amitabh Kant has confirmed that the government’s policy think tank has given the proposal. If the proposal is accepted it will help the segment to get at lower interest rates. At present, the loans are being provided under the auto retail category but the lenders might be different for financing the electric vehicles.

It will also help to reduce carbon emissions he added. “The inclusion of EVs under PSL would not only reduce the cost of finance but also provide finance to more people, thus increasing penetration of EVs in India,” the financial daily quoted Kant as saying. “Our view is that there is a case for this in the context of the impending climate change crisis and India’s recent commitments at COP26 in Glasgow.”

“Some banks have had bitter experiences with financing the earlier version of e-rickshaws, which were powered by lead-acid batteries and were not good-quality products. The financial institutions had to bear losses in cases of default, as their residual value was low,” said Kant.

In September, the NITI Aayog with US-based RMI and RMI India’s support launched the ‘Shoonya’ Campaign an initiative to promote zero-pollution delivery vehicles by working with consumers and the industry. The campaign aims to accelerate the adoption of electric vehicles (EVs) in the urban deliveries segment and create consumer awareness about the benefits of zero-pollution delivery.

As part of the campaign, a corporate branding and certification programme is being launched to recognise and promote the industry’s efforts towards transitioning to EVs for final-mile deliveries. An online tracking platform will share the campaign’s impact through data such as vehicle kilometres electrified, carbon savings, criteria pollutant savings and other benefits from clean delivery vehicles.

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