Regulatory Alerts2025-07-17 | Banking Act Direction No. 03 of 2025Loan to Value Ratios for Motor Vehicle Credit Facilities
The Central Bank of Sri Lanka has issued Banking Act Directions No. 03 of 2025 to update loan-to-value ratios for motor vehicle credit facilities. Effective 18 July 2025, the new rules revoke three prior directives from 2018 and 2020 that previously set lending limits for motor vehicles. Grounded in Sections 46(1) and 76J(1) of the Banking Act, the framework standardizes risk-based lending caps to maintain financial stability in motor vehicle financing.
CENTRAL BANK OF SRI LANKA
17 July 2025 | BANKING ACT DIRECTIONS | No. 03 of 2025
LOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTED IN RESPECT OF MOTOR VEHICLES
Issued under Sections 46(1) and 76J(1) of the Banking Act, No. 30 of 1988, as amended.
The following Directions issued under Banking Act are hereby revoked with effect from 18.07.2025:
i. Banking Act Directions No. 01 of 2018 on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles.
ii. Banking Act Directions No. 05 of 2018 on Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles.
iii. Banking Act Directions No. 04 of 2020 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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