The Bangladesh Bank (BB) has opened the door to larger auto loans for electric and hybrid vehicles, allowing banks to lend up to Tk 80 lakh per individual for such purchases, as the country signals a broader shift toward cleaner transport.
In a circular issued today, it said the new limit includes insurance coverage and applies exclusively to electric and hybrid vehicles. Loans for conventional vehicles remain capped at Tk 60 lakh.
The BB circular also revised personal loan limits. Individuals can now take out unsecured personal loans of up to Tk 10 lakh, doubled from the previous Tk 5 lakh. For loans backed by proper securities, the ceiling has been raised to Tk 40 lakh from Tk 20 lakh. Loans secured against liquid assets remain outside this cap.
BB also directed banks to ensure that growth in consumer loans does not exceed their overall loan growth, a safeguard against runaway retail lending.
The new rules supersede previous circulars issued in 2004, 2017, and 2024, and took effect immediately under the Bank Company Act, 1991.
PUSH FOR GREENER VEHICLES
In addition to the new loan limits for EVs and hybrid cars, the BB also relaxed equity requirements for green vehicle loans.
While conventional auto loans require a debt-equity ratio of 60:40, buyers of electric and hybrid cars can now borrow at a more favourable ratio of 80:20, meaning a smaller down payment relative to the loan amount.
The regulator said the changes reflect rising automobile prices and growing demand for cleaner, more energy-efficient vehicles in the country.
The BB circular comes days after the cabinet approved sweeping duty exemptions on imports of brand-new electric buses and trucks, reinforcing what appears to be a coordinated government push toward greener transport.
Under the decision, all customs duty, regulatory duty, supplementary duty, advance tax, and advance income tax on new electric buses with a minimum of 17 seats will be waived — leaving only a 15 percent VAT, except for buses used for student transportation, which are fully exempt.
Similar exemptions will apply to new electric trucks with a capacity of five tons or more.
The moves come as Bangladesh is experiencing fuel crunch stemming from supply disruptions caused by the US-Israeli war on Iran. Long lines of vehicles were seen waiting over 10 hours outside fuel stations when the crisis was at its peak. Bangladesh is almost entirely dependent on imports for fuel oil, making energy diversification a national priority for the government.
