Bangladesh Bank Extends Personal and Consumer Loan Tenure to 8 Years
Auto loan ceiling raised to BDT 80 Lakh with relaxed debt equity for eco-friendly vehicles
angladesh Bank has extended the maximum repayment tenure for personal and consumer durable loans from 5 years to 8 years to ease installments for borrowers.
To facilitate convenient repayment facilities for retail borrowers, Bangladesh Bank has extended the maximum maturity period for personal loans and consumer durables financing. According to a circular issued by the central bank on Thursday (June 25) to the managing directors and chief executives of all scheduled banks, the repayment limit has been increased to 8 years from the previous ceiling of 5 years.
The central bank clarified that the Prudential Regulations for Consumer Financing have been amended accordingly, ensuring that the loan tenure must not exceed the 8-year boundary. Additionally, the previous restriction stating that consumer financing growth cannot surpass a bank's overall credit growth has been officially revoked.
Furthermore, Bangladesh Bank has relaxed policies regarding automotive financing to support domestic industries and eco-friendly vehicles. Under the updated regulations, the ceiling for standard auto loans remains capped at BDT 60 lakh, but the limit has been extended up to BDT 80 lakh for purchasing electric, hybrid, and locally assembled cars.
The central bank has also modified the loan-to-equity ratio for sustainable and local vehicles, permitting banks to finance up to 80% of the vehicle value, whereas standard automotive financing retains its 60% threshold. Financial analysts observe that the extended loan tenures will decrease monthly installment pressures, making personal and automotive credit lines more accessible to middle-income families.
//DBTech/BBPR/EK//
