Bangladesh Bank Raises Auto Loan Ceiling

Bangladesh Bank has expanded consumer financing limits, enabling scheduled banks to extend higher auto and personal loans in a policy shift designed to accommodate rising consumer demand and to support the adoption of environmentally friendly vehicles in the country.

In a notification issued on Tuesday, the central bank confirmed that banks may now provide auto loans of up to Tk 8.0 million for the purchase of electric and hybrid vehicles. This marks an increase from the previous ceiling of Tk 6.0 million applicable to conventional automobiles.

The revised framework also introduces relaxed equity requirements for green vehicles and adjusts personal loan thresholds in response to increasing consumer prices and evolving market conditions. According to the central bank, demand for electric and hybrid vehicles has been steadily rising due to their energy efficiency and environmentally friendly characteristics.

Under the updated rules, auto loans will continue to operate under a maximum debt-to-equity ratio of 60:40 for general cases. However, for hybrid and electric vehicles, the ratio has been significantly eased to 80:20, compared with the earlier 70:30 requirement. The adjustment is intended to make financing more accessible for cleaner transport options.

Bangladesh Bank further explained that the consumer goods market has expanded substantially in recent years, supported by higher per capita income and consistent economic growth. In light of prevailing market prices and growing demand, the regulator has revised Regulation-30 of the Prudential Regulations for Consumer Financing.

Significant changes have also been made to personal loan limits. The ceiling for unsecured personal loans has been doubled from Tk 0.50 million to Tk 1.0 million, while secured personal loans have been increased from Tk 2.0 million to Tk 4.0 million.

In addition, banks have been instructed to maintain prudential discipline in overall lending. The central bank has directed that, in all cases, the growth rate of total loans under “Consumer Financing” must not exceed the growth rate of a bank’s overall loan portfolio.

Revised Consumer Financing Limits

The revised policy reflects a broader regulatory effort to align consumer financing rules with changing market dynamics while encouraging investment in cleaner transportation technologies.