CBSL cuts vehicle financing caps again from May 25

The Central Bank of Sri Lanka (CBSL) has introduced stricter vehicle financing regulations, reducing the amount that banks and finance companies can lend for vehicle purchases under new loan-to-value (LTV) limits.

The revised regulations, issued through Directions No. 01 of 2026 by CBSL Governor Dr. Nandalal Weerasinghe, will take effect from 25 May 2026.

According to the new rules, the maximum financing available for commercial vehicles has been lowered to 60% of the vehicle value, compared with the previous 70% limit that was introduced in November 2025.

For motor cars, SUVs, vans, three-wheelers and several other vehicle categories, the maximum financing ratio has been reduced to 40%, down from the earlier 50% cap.

CBSL stated that these limits will apply to brand-new vehicles as well as vehicles that have been registered for less than one year from their first registration date. Vehicles that have been in use locally for more than one year after their initial registration will be eligible for financing of up to 60% of their value.

The Central Bank has also outlined transitional arrangements for vehicle imports that were already underway before the new regulations came into force.

Under these provisions, vehicles imported through Letters of Credit (LCs) opened between 8 November 2025 and 25 May 2026 will continue to qualify for financing under the previous LTV limits.

CBSL noted that the updated directions were issued under Section 105(1) of the Central Bank of Sri Lanka Act No. 16 of 2023 as part of its macroprudential measures aimed at regulating credit exposure within licensed banks, finance companies and registered leasing institutions.

Key Changes at a Glance

• Commercial vehicles: Maximum financing reduced from 70% to 60%
• Cars, SUVs, vans and three-wheelers: Maximum financing reduced from 50% to 40%
• Vehicles registered for more than one year: Financing capped at 60%
• Previous limits remain applicable for vehicles imported under LCs opened between 8 November 2025 and 25 May 2026
• New regulations effective from 25 May 2026