Regulatory Alerts2017-01-13 | Finance Business Act Direction No. 1 of 2017Loan to Value Ratios for Credit Facilities in respect of Motor Vehicles
The Central Bank of Sri Lanka issued Finance Business Act Direction No. 01 of 2017 to establish maximum Loan to Value ratios for motor vehicle credit facilities granted by Licensed Finance Companies. Effective 16 January 2017, the regulation caps financing at 90 percent for commercial vehicles, 50 percent for cars and SUVs, 25 percent for three-wheelers, and 70 percent for other vehicles, with a uniform 70 percent limit for vehicles registered for over one year. The directive also grants exemptions for tourism and transportation fleets, mandates internal risk management procedures for such exceptions, and revokes previous 2015 directions.
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