BB Raises Loan Limits, Boosts EV Financing Incentives

The Bangladesh Bank has increased the ceilings for auto and personal loans, aiming to adjust credit policies in line with rising vehicle prices and higher living costs. The move also introduces new incentives to promote electric and hybrid vehicles.

In a directive issued by the Banking Regulation and Policy Department on Tuesday, the central bank revised its Prudential Regulations for Consumer Financing with immediate effect.

The policy update reflects rising per capita income, steady economic growth, and growing demand for consumer goods and durable assets.

Under the revised framework, auto loan limits have been significantly increased. Banks can now provide loans of up to Tk60 lakh per individual for standard vehicles, with a maximum debt-equity ratio of 60:40. Insurance costs will be included in the total loan exposure, covering facilities extended to dependent family members.

To encourage cleaner transport options, the ceiling for electric and hybrid vehicles has been raised to Tk80 lakh per individual. These loans will also carry a more flexible 80:20 debt-equity ratio, allowing lower down payments.

The central bank has also updated rules for personal loans and consumer durables. Unsecured loans are now capped at Tk10 lakh, while secured loans may go up to Tk40 lakh depending on collateral. Loans backed by liquid securities will remain outside these limits.

According to the central bank, the revised structure responds to higher market prices and increasing consumer demand. The enhanced support for electric and hybrid vehicles is intended to accelerate the shift toward energy-efficient and environmentally friendly transport.

To maintain financial stability, banks have been instructed to ensure that the growth of consumer lending does not exceed the overall growth of their loan portfolios, helping prevent over-concentration in consumer credit.

The directive, issued under Section 45 of the Bank Company Act, 1991 (amended), replaces several earlier circulars issued in 2004, 2017, and 2024.