Central Bank Announces Incentives for Electric and Hybrid Vehicle Purchases

In a significant move to promote eco-friendly transportation, Bangladesh Bank has introduced enhanced credit facilities for the purchase of electric and hybrid vehicles. Under the new policy, customers can now avail of auto loans up to a maximum of 80 lakh BDT.

The central bank issued a circular regarding this update on Tuesday (May 5), distributing it to all scheduled banks across the country.

Higher Loan Ceilings and Favorable Ratios
The new guidelines distinguish between traditional fuel-powered vehicles and environmentally friendly alternatives:

Electric & Hybrid Vehicles: The loan limit has been set at 80 lakh BDT. Furthermore, the Debt-Equity ratio has been eased to 80:20, meaning the bank can finance up to 80% of the vehicle's value.

Conventional Vehicles: For internal combustion engine vehicles, the maximum loan limit remains at 60 lakh BDT, with a Debt-Equity ratio of 60:40.

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

Doubling of Personal Loan Limits
In addition to the automotive sector updates, the central bank has significantly increased the ceiling for personal loans. An individual can now borrow up to 40 lakh BDT for personal use, a 100% increase from the previous limit of 20 lakh BDT.

Industry experts believe these initiatives will accelerate the adoption of green technology in the transport sector while boosting credit flow within the banking industry.