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

MONETARY BOARD
CENTRAL BANK OF SRI LANKA

17 February 2017 | FINANCE BUSINESS ACT DIRECTIONS | No. 03 of 2017

AMENDMENT TO DIRECTIONS ON THE LOAN TO VALUE RATIOS FOR CREDIT FACILITIES IN RESPECT OF MOTOR VEHICLES

The interpretations in Direction 5 of the Finance Business 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.
   5.2 The value of the vehicle shall be the market value. LFCs 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
   5.3 LFCs should ensure that the valuation is obtained at the time of granting credit facilities and provides a true and fair value.
   5.4 The vehicle classes provided by the Department of Motor Traffic (DMT) may be categorised for the purpose of the Direction as in Table 1 below:

Table 1 – Categorisation of DMT Vehicle Classes

Vehicle Category	Vehicle Class of DMT	LTV
Commercial vehicles (Lorries and Heavy Vehicles)	C1, C, CE, DE, G1, G, J	90%
Motor Cars, SUVs and Vans	B, D1, 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.

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MONETARY BOARD
CENTRAL BANK OF SRI LANKA

17 February 2017 | FINANCE BUSINESS ACT DIRECTIONS | No. 03 of 2017

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 3.1 shall mean any business entity registered at any state authority for the purpose of business of transportation of goods or passengers.
5.8 An LTV of 70% 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 LFC on or before 16 January 2017.

(Signature)

Dr. Indrajit Coomaraswamy
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka

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