Regulatory Alerts2021-02-17 | Finance Leasing Act Directions No.02 of 2021Amendments to Directions on Loan-to-Value Ratios for Credit Facilities Granted in Respect of Motor Vehicles
The Central Bank of Sri Lanka issued these Directions on 17 February 2021 to amend loan-to-value ratios for motor vehicle credit facilities provided by Specialized Leasing Companies. The update replaces the previous regulatory provision by establishing an eighty percent loan-to-value ratio for registered vehicles that have been used in Sri Lanka for over one year following initial registration. This amendment applies under Section 34 of the Finance Leasing Act No. 56 of 2000 and mandates immediate implementation by the affected financial institutions.
CENTRAL BANK OF SRI LANKA
17 February 2021 | FINANCE LEASING ACT DIRECTIONS | No. 02 of 2021
AMENDMENTS TO DIRECTIONS ON LOAN TO VALUE RATIOS FOR CREDIT FACILITIES GRANTED IN RESPECT OF MOTOR VEHICLES
Issued under Section 34 of the Finance Leasing Act, No.56 of 2000.
The Central Bank of Sri Lanka issues Directions as follows for implementation of loan to value ratios in respect of credit facilities granted by Specialized Leasing Companies (SLCs) for the purpose of purchase or utilization of motor vehicles.
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The following will replace Directions 1 (i) (b) of the Finance Leasing Act Directions No.03 of 2020 on Amendments to Directions on Loan to Value Ratios for Credit Facilities Granted in respect of Motor Vehicles.
(b) 80 per cent in respect of registered vehicles which have been used in Sri Lanka for more than one year after the first registration.
J D S J Nanayakkara Director, Department of Supervision of Non-bank Financial Institutions, Central Bank of Sri Lanka
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