Amendment to Directions on Loan-to-Value Ratios for Motor Vehicle Credit Facilities

15 February 2017
MONETARY BOARI)
CENTRAL BANK OF SRI LANKA
BANKING ACT DIRECTIONS No.02 of20l7 AMENDMENT TO DIRECTIONS ON THE LOAN TO VALUE RATIOS FOR CREDIT FACILITIES IN RESPECT OF MOTOR VEHICLES The interpretations in Direction 5 of the Banking Act Directions No. 01 of 2017 are amended by replacing the following:
5. 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. The value of the vehicle shall be the market value. Licensed banks may use the following for the purpose of valuing vehicles:
i) Brand new vehicles - value given by authorized agents ii) Reconditioned vehicles - valuation considered at customs or invoice value given by the dealer iii) Registered vehicles - value given by a professional valuer Licensed banks should ensure that the valuation is obtained at the time of granting credit facilities and provides a true and fair value. The vehicle classes provided by the Department of Motor Traffic (DMT) may be categorised for the pulpose of the Direction as in
Table 1below:
able I le Classes - Ca sation of DM'l'Vehic Vehicle Category Vehicle Class of DMT LTV Commercial vehicles (Lorries and Heavy Vehicles) c1, c, cE, DE, G1, G,J 90o/o Motor Cars, SUVs and Vans B, Dl, D 50% Three wheelers B1 25% Any other vehicle A1, A 70%
5.5 Fleet of vehicles referred to in Direction 3.1 shall mean two or more
vehicles.
5.2
5.3
5.4

15 February 2017
MONETARY BOARD
CENTRAL BANK OF SRI LANKA
BANKING ACT DIRECTIONS No.02 of2017
5.6 Company engaged in tourism referred to in Direction 3.1 shall mean
a company registered with the Sri Lanka Tourism Development Authority or any other authority to provide services to tourism.
5.7 A company engaged in transportation referred to in Direction
shall mean any business entity registered at any state authority the purpose ofbusiness oftransportation ofgoods or passengers.
5.8 An LTV of 70Yo may be approved for credit in respect of all
vehicles where applications for credit have been received or credit facilities have been approved by a licensed bank on or before 16 January 2017. tt"*"Q w\ Dr. Indrajit Coomaraswamy Chairman of the Monetary Board and Governor of the Central Bank of Sri Lanka 3.1 for