Regulatory Alerts2025-07-17 | Central Bank of Sri Lanka Act Directions No. 02 of 2025Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles
The Central Bank of Sri Lanka issued Directions on 17 July 2025 imposing maximum loan-to-value caps on credit facilities for motor vehicles to enhance macroprudential stability. Effective 18 July 2025, licensed banks, finance companies, and leasing establishments must limit lending to 60% for cars and SUVs, 80% for commercial vehicles, 50% for three-wheelers, and 70% for other vehicles based on market value. The directive also prohibits other vehicle credit facilities and establishes transitional provisions for existing letters of credit opened prior to the effective date.
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