Regulatory Alerts2018-08-24 | Direction No. 6 of 2018Added · Updated
Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles
The Central Bank of Sri Lanka issued Finance Business Act Directions No. 06 of 2018 to amend existing Loan to Value ratio regulations for motor vehicle credit facilities. The amendments introduce exemptions from standard LTV limits for vehicle fleets used by tourism and transportation companies, government agencies procuring vehicles via finance leasing, and motorcycles purchased by public service field officers and teachers in difficult areas. Licensed Finance Companies are required to establish internal limits and adopt adequate risk management procedures when granting these exempted credit facilities.
MONETARY BOARD
CENTRAL BANK OF SRI LANKA
24 August 2018
FINANCE BUSINESS ACT DIRECTIONS
No. 06 of 2018
AMENDMENTS TO DIRECTIONS ON LOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTED IN RESPECT OF MOTOR VEHICLES
Issued under section 12 of the Finance Business Act, No. 42 of 2011.
Finance Business Act Directions No. 5 of 2018 on Loan to Value ratios for credit facilities granted in respect of motor vehicles are amended by replacing the following Directions.
3. Exemptions from LTV ratio
3.1 The limits in Direction 2 above shall not be applicable to credit facilities granted:
(i) to any company engaged in tourism and/or transportation for purchase of vehicle fleets to be utilized for their core business operations, provided that such vehicles financed shall not be transferred to any person or entity within one year from the date of the first registration;
(ii) for procurement of vehicles for Government Agencies under the finance leasing method specified by the Ministry of Finance and Mass Media; and
(iii) for credit facilities granted for purchase of motorcycles by field officers in the public service and teachers servicing in difficult areas under the proposed concessionary leasing facility provided by the Government.
3.2 LFCs shall have internal limits and adopt adequate risk management procedures in granting such credit facilities.
Dr. Indrajit Coomaraswamy
Chairman of the Monetary Board and
Governor of the Central Bank of Sri Lanka
More like this from CBSL
CBSL published 1 document in the last 30 days. We email you each new one the day it's published.