Bangladesh Bank has revised its consumer financing regulations, raising loan ceilings for automobile and personal loans on Tuesday in a move that reflects both rising market demand.
The directive also comes after repeated pressure from bankers to relax lending rules, as banks are sitting on excess liquidity in the system.
According to internal sources, the decision was significantly influenced by repeated requests from managing directors of various banks during recent bankers’ meetings with the central bank.
Bankers reportedly highlighted that a large volume of funds is currently lying idle in the banking system due to a lack of strong large-scale investment demand in the economy.
With industrial and corporate investment remaining relatively subdued, many banks have been increasingly shifting their strategic focus toward retail lending segments such as consumer loans, auto financing, and personal credit.
In this context, lenders repeatedly urged Bangladesh Bank to relax existing caps to help them deploy surplus liquidity more effectively and maintain earnings momentum.
Responding to these concerns, the central bank has increased the maximum auto loan ceiling to Tk 60 lakh per individual for conventional vehicles.
In a further boost for green financing, the limit for electric and hybrid vehicles has been raised to Tk 80 lakh per borrower.
Alongside the revised loan ceilings, the debt-equity structure for auto financing has also been adjusted.
The existing 60:40 ratio for conventional vehicles remains unchanged. However, for electric and hybrid vehicles, the ratio has been relaxed from 70:30 to 80:20, allowing banks to finance a larger portion of the vehicle cost.
The central bank clarified that loans taken by dependent family members will also be counted under the main borrower’s total limit.
This means all such loans will be treated as part of one combined exposure. It is intended to ensure that the borrower’s overall credit risk is assessed in a single, consolidated way.
In the consumer lending segment, Bangladesh Bank has set the unsecured personal loan limit at Tk 10 lakh per individual.
At the same time, total personal borrowing has been capped at Tk 40 lakh per person under any circumstances.
However, loans backed by liquid securities will remain exempt from these restrictions, allowing greater flexibility for secured lending arrangements.
Bangladesh Bank further instructed banks to ensure that the growth rate of consumer financing does not exceed the overall growth rate of their total loan portfolios.
The central bank directive said that the policy adjustments also reflect broader macroeconomic trends, including rising per capita income, steady GDP growth, and increasing demand for consumer goods and services.
The growing popularity of electric and hybrid vehicles was also cited as a key factor behind the revised auto loan framework.
The directive has been issued to the managing directors and chief executives of all scheduled banks and takes immediate effect.
