Regulatory Alerts2025-07-17 | Finance Business Act Direction No.02 of 2025Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles
The Central Bank of Sri Lanka has issued updated directions under the Finance Business Act to establish standardized loan-to-value ratios for motor vehicle credit facilities. Effective 18 July 2025, the new framework supersedes five previous amendments from 2018 to 2021, streamlining regulatory compliance for financial institutions. By codifying precise lending limits, the directive mitigates credit risk while maintaining market liquidity for vehicle financing.
CENTRAL BANK OF SRI LANKA 17 July 2025 | FINANCE BUSINESS ACT DIRECTIONS | No. 02 of 2025
LOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTED IN RESPECT OF MOTOR VEHICLES
Issued under Section 12 of the Finance Business Act, No. 42 of 2011.
The following Directions issued under Finance Business Act are hereby revoked with effect from 18.07.2025:
i. Finance Business Act Directions No. 02 of 2018 on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles. ii. Finance Business Act Directions No. 06 of 2018 on Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles. iii. Finance Business Act Directions No. 02 of 2019 on Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles. iv. Finance Business Act Directions No. 03 of 2020 on Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles. v. Finance Business Act Directions No. 02 of 2021 on Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles.
(Signature)
Dr. P Nandalal Weerasinghe Chairperson of the Governing Board and Governor of the Central Bank of Sri Lanka
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