New leasing scheme for vehicles comes into effect

Jan 18, 2017 (LBO) - Central Bank of Sri Lanka has advised commercial banks and leasing companies to follow new regulations in granting loans for vehicle leasing including three wheelers. "The new circular has slapped additional controls over credit facilities afforded to three wheelers. Under the new leasing regulations the leasing facility offered will be 25 percent of the value of a three wheeler," the Finance Ministry said in a statement. "Currently, loans can be borrowed after paying 10 percent of the total value of a three wheeler which a borrower intends to buy." Other commercial vehicles can be leased up to 90 percent of their value. The circular specifies that lorries and heavy vehicles fall into this category. Over the years, three-wheelers have outnumbered all other categories of vehicles except for motorcycles in Sri Lanka. However the new regulations with regard to leasing loans for vehicles will not be applied to transport service providers in the tourism sector. "They will be able to enjoy 100 percent loan facilities to lease out vehicles." Meanwhile, university scholars who brought forward research details pointed out the need for a regulatory body with regard to three wheelers. Budget 2017 which welcomed the argument by university experts has proposed new regulations in leasing out three wheelers. Proposed traffic laws and spot fines are scheduled to be revised in the near future and the Finance Ministry believes that the new regulations imposed on loans will make an impact on leasing out of three wheelers.