Regulatory Alerts2018-02-08 | Banking Act Directions No. 1 of 2018Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles
The Monetary Board of the Central Bank of Sri Lanka has issued binding directions establishing maximum loan-to-value (LTV) ratios for motor vehicle credit facilities granted by licensed commercial and specialized banks. Commencing January 1, 2018, the directive caps LTV ratios at 90 percent for new or lightly used vehicles and 70 percent for older registered vehicles, while exempting tourism and transportation companies purchasing operational vehicle fleets subject to internal risk controls. Licensed banks must determine vehicle market values at the time of credit grant using authorized agents, dealers, or professional valuers, and this directive supersedes all preceding 2017 LTV regulations.
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