Sri Lanka, July 18 -- In a decisive move to strengthen macroprudential policy and mitigate systemic financial risks, the Central Bank of Sri Lanka (CBSL), acting as the Macroprudential Authority, has issued new Directions to licensed financial institutions to impose maximum caps on loan-to-value (LTV) ratios for vehicle-related credit facilities.

The directive, which takes effect from 18 July 2025, applies to all Licensed Commercial Banks, Licensed Specialised Banks, Licensed Finance Companies (LFCs), and Registered Finance Leasing Establishments (RFLEs).

The measure is designed to harmonise existing LTV caps across institutions and reinforce prudent lending practices, particularly for credit extended for the purchase or utilisation of ...