BB makes car loan stringent to reduce inflationary pressure:Daily Sun

 Bangladesh Bank (BB) has made the car loan to clients stringent by directing banks to collect 50 percent equity while the total size of loan will not exceed Tk 4 million in view of containing inflation. From now on, an aspirant for loan from banks to purchase car will need to provide 50 percent of total value as equity. The loan must be within Tk 4 million. The BB authority issued a circular on W
ednesday, asking immediate compliance of the directive. “It has been decided considering the existing market price and consumer demand for vehicles,” the circular said. “The banks shall not allow auto loan [including insurance] exceeding Tk 4 million per individual in this regard. For the purpose of this regulation, auto loan facility to the dependent members of an individual shall also be treated as part of the exposure of that individual,” the circular added. While allowing auto loans, the financing facility shall be provided at a maximum debt-equity ratio of 50:50, read the circular. The central bank source said the step has been taken in view of containing inflation. Inflation in July soars to 7.04 percent against the central bank’s target of 7 percent. A day before, the central bank has refused a proposal of financial institutions on relaxation of car loans guideline.