In a major move to promote eco-friendly transportation and support sustainable consumer financing, Bangladesh Bank has raised the loan limits for both auto and personal loans. The revised policy increases purchasing power for consumers while introducing specific incentives for electric and hybrid vehicles.

According to a circular issued by the central bank on Tuesday (May 5), people can get up to Tk 80 lakh in bank loans to buy electric and hybrid cars. For regular fuel-powered cars, the loan limit is Tk 60 lakh.

To make financing more accessible, the central bank has relaxed the debt-equity ratio for green vehicles. While the ratio for conventional fuel-powered cars remains capped at 60:40 (60 percent loan and 40 percent down payment), it has been enhanced to 80:20 for electric and hybrid vehicles, allowing buyers to finance up to 80 percent of the vehicle’s value through bank loans.

This decision aims to make environmentally friendly vehicles more affordable and increase their use in Bangladesh. The circular also says that when calculating a person’s total loan limit, car loans taken by their dependent family members will be included.

The new rule has been sent to all bank CEOs and managing directors. Its goal is to reduce pollution by making fuel-efficient cars more affordable for middle-class and professional buyers. Industry experts think this change will help the car market grow, especially as more people are choosing hybrid vehicles due to higher fuel prices and global environmental trends.