Regulatory Alerts2017-02-17 | Finance Leasing Act Directions No. 2 of 2017Amendment to Loan-to-Value Ratio Directions for Motor Vehicle Credit Facilities
The Central Bank of Sri Lanka amended its Finance Leasing Act Directions to establish standardized loan-to-value (LTV) ratios for motor vehicle credit facilities. The directive mandates that lenders value vehicles at market rates and applies specific LTV caps of 90 percent for commercial vehicles, 50 percent for cars and vans, 25 percent for three-wheelers, and 70 percent for other vehicles. It also clarifies definitions for vehicle fleets and tourism or transportation entities while permitting a temporary 70 percent LTV for applications processed on or before 16 January 2017.
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