Rattanindia welcomes Niti Aayog’s proposal of prioritizing EV loans
Rattanindia Enterprises, an Indian conglomerate which holds a significant stake in Revolt Motors, has welcomed a proposal from Niti Aayog to the Reserve Bank of India (RBI) to categorize loans to electric vehicles (EVs) as priority sector lending (PSL).
By including EVs under priority sector lending, the costs of finance will be reduced and will enable financing to more people to buy them, thereby boosting their penetration in the country, said Rattanindia Enterprises, citing press reports.
Under the priority sector lending framework, 40% of the total credit of banks should be loaned compulsorily to certain sectors as mandated by the banking regulator for allocating financing to promote growth in the sectors.
After including EVs in the priority sector lending framework, banks will have to compulsorily lend to EV customers. This will enhance the availability of finance to EV customers and also cut down the financing costs, said Rattanindia Enterprises.
Niti Aayog is also said to be working with the World Bank to establish a ‘first loss risk sharing instrument’ worth $300 million to make financing better for EVs. The State Bank of India is the program manager for the facility, under which total financing is anticipated to be nearly $1.5 billion. Rattanindia Enterprises expects this facility to help in mitigating financing risk for lenders offering loans to EV customers.