Car loan ceiling doubled to Tk 4 million

The Bangladesh Bank has doubled the car loan ceiling, including vehicle insurance, to Tk 4 million in view of surplus liquidity.

The move is likely to be welcomed by those planning to get a ride with bank loan.

Until now, as much as 30 percent -- or a maximum Tk 2 million -- of the car’s price could be paid with bank loans.

The central bank’s Wednesday circular increased it by 20 percent. This means, anyone wanting to buy a car worth Tk 8 million can get half the amount in loan.

However, the bank loan will also include the car’s insurance and will not exceed Tk 4 million.

The 2014-15 budget has reduced supplementary duty on most high-end cars but duties on smaller cars were unchanged.

The ‘vehicle financing policy’, amended considering car prices and demands, would be implemented soon, Bangladesh Bank said.

Before 2012, it was possible to buy cars on bank loans alone.

But faced with liquidity crisis, the central bank in 2012 fixed the car loan ceiling to 30 percent of the vehicle price.

However, the situation is different now as banks have a surplus liquidity of over Tk 1 trillion.

Of it, more than Tk 250 billion is lying idle.