Bangladesh Bank raises car loan ceiling to Tk 8 million for electric, hybrid vehicles

In a major move to promote eco-friendly transportation, Bangladesh Bank has doubled the personal loan ceiling and significantly increased the limit for car loans, specifically targeting electric and hybrid vehicles.

According to a circular issued by the central bank on Tuesday (May 5), a person can now avail a personal loan of up to Tk 4 million (40 lakh), up from the previous limit of Tk 2 million (20 lakh), UNB reports. 

To encourage the use of environmentally friendly vehicles, the central bank has introduced a specialized credit facility for electric and hybrid cars. Under the new guidelines, customers can now secure auto loans up to Tk 80 lakh for these categories.

For conventional fuel-run vehicles, the maximum loan limit has been set at Tk 60 lakh.

The central bank has also relaxed the debt-equity ratio to make financing more accessible. For conventional cars, the ratio remains at 60:40 (60 percent loan and 40 percent down payment). However, for electric and hybrid vehicles, the ratio has been enhanced to 80:20, allowing buyers to finance up to 80 percent of the vehicle’s value through bank loans.

The circular clarified that while determining an individual’s total ‘credit exposure,’ any auto loans taken by their dependent family members will also be included in the calculation.

The directive, sent to the managing directors and CEOs of all commercial banks today, aims to reduce the country’s carbon footprint by making high-efficiency vehicles more affordable for middle-class and professional buyers.

Industry insiders believe this policy shift will provide a much-needed boost to the local automobile market, which has been shifting toward hybrid technology due to rising fuel costs and global environmental trends.