Regulatory Alerts2017-06-02 | Finance Business Act Direction No. 4 of 2017Amendment to Directions on Loan to Value Ratios for Motor Vehicle Credit Facilities
The Central Bank of Sri Lanka issued Direction No. 04 of 2017 to amend the Loan to Value (LTV) ratios for motor vehicle credit facilities under the Finance Business Act Directions No. 03 of 2017. The directive updates the definitions of credit facilities and establishes specific LTV limits based on Department of Motor Traffic vehicle categories. These limits are set at 90% for commercial vehicles, 50% for motor cars, SUVs, and vans, 25% for three-wheelers, and 70% for other vehicles.
MONETARY BOARD CENTRAL BANK OF SRI LANKA
02 June 2017 | FINANCE BUSINESS ACT DIRECTIONS | No. 04 of 2017
AMENDMENT TO DIRECTIONS ON THE LOAN TO VALUE RATIOS FOR CREDIT FACILITIES IN RESPECT OF MOTOR VEHICLES
The Directions 5.1 and 5.4 of the Finance Business Act Directions No. 03 of 2017 on Amendment to Directions on the Loan to Value Ratios for Credit Facilities in Respect of Motor Vehicles are amended by replacing the following:
- Interpretations
5.1 Credit facilities shall mean finance leases, hire purchase facilities and all other credit facilities granted for the purpose of purchase or utilisation of vehicles by end-users.
5.4 The vehicle classes provided by the Department of Motor Traffic (DMT) may be categorized for the purpose of the Direction as in Table 1 below:
Table 1 – Categorization of DMT Vehicle Classes
| Vehicle Category | Vehicle Class of DMT | LTV |
|---|---|---|
| Commercial vehicles | C1, C, CE, D1, D, DE, G1, G, J | 90% |
| Motor Cars, SUVs and Vans | B (other than light trucks & single cabs) | 50% |
| Three wheelers | B1 | 25% |
| Any other vehicle | A1, A, light trucks & single cabs categorized under B | 70% |
(Signature)
Dr. Indrajit Coomaraswamy Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka