Regulatory Alerts2018-06-05 | Banking Act Directions No. 3 of 2018Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles
The Central Bank of Sri Lanka has amended its Banking Act Directions on loan-to-value ratios for motor vehicle credit facilities. The updated rules exempt tourism and transportation companies purchasing operational vehicle fleets, along with government agencies using specified finance leasing methods, from standard limits. Licensed banks must establish internal caps and implement robust risk management procedures to oversee these exempted facilities.
05 June 2018 + MONETARY BOARI) CENTRAL BANK OT SRI LANKA BANKING ACT DIRECTIONS No.03 of2018 AMENDMENTS TO DIRECTIONS ON LOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTED IN RESPECT OF MOTOR YEHICLES Banking Act Directions No. 1 of 2018 on Loan to Value ratios for credit facilities granted in respect of motor vehicles are amended by replacing the following Directions. 3. Exemptions from LTV ratio 3.1 The limits in Direction 2 above shall not be applicable to credit facilities granted: (i) to any company engaged in tourism and/or transportation for purchase of vehicle fleets to be utilized for their core business operations, provided that such vehicles financed shall not be transferred to any person or entity within one year from the date of the first registration; and (ii) for procurement of vehicles for Govemment Agencies under the finance leasing method specified by the Ministry of Finance and Mass Media. 3.2 Licensed banks shall have internal limits and adopt adequate risk management procedures in granting such credit facilities. qlrfr"ou'A*-1 , Dr. Indrajit Coomaraswamy Chairman of the Monetary Board and Governor of the Central Bonk of Sri Lanka