CBSL Revises Vehicle Loan Limits

COLOMBO (News 1st); The Central Bank of Sri Lanka, as the Macroprudential Authority has issued directive to Licensed Commercial Banks and Licensed Specialised Banks, Licensed Finance Companies (LFCs) and Registered Finance Leasing Establishments (RFLEs) for the implementation of maximum caps on loan-to-value (LTV) ratio in respect of credit facilities granted for the purpose of purchase or utilisation of motor vehicles.

Under the new guidelines, the maximum loan-to-value ratio for commercial vehicles has been set at 70%, while the maximum loan-to-value ratio for private vehicles has been set at 50%. This marks a notable change from the previous ratios.

In July, the Central Bank had allowed loan-to-value ratios of 80% for commercial vehicles, 60% for private vehicles, 50% for three-wheelers, and 70% for other types of vehicles.

Previously, leasing facilities were categorized under four separate groups, but the revised framework now applies to only two categories.

Under the new system, one category covers commercial vehicles, while the other includes motorcars, vans, three-wheelers, and other vehicles.