Bangladesh Bank has overhauled its consumer credit framework for the first time since 2024, raising auto and personal loan ceilings and introducing preferential financing conditions for electric and hybrid vehicles — changes that take effect immediately and touch every retail lending desk at every scheduled bank in the country. The directive, issued by the Banking Regulation and Policy Department on 5 May 2026 under Section 45 of the Bank Company Act, 1991, supersedes previous consumer financing circulars issued in 2004, 2017 and 2024.
Revised Auto Loan Limits
The most immediately significant change affects automobile financing. Banks may now extend auto loans of up to Tk 60 lakh per individual for conventional fuel-run vehicles, with the maximum debt-equity ratio maintained at 60:40 — meaning a borrower must contribute at least 40 percent of the vehicle’s cost as equity. The ceiling includes insurance costs and extends to auto facilities provided to an individual’s dependent family members, which now count as part of that individual’s total credit exposure.
For electric and hybrid vehicles, the framework introduces a dedicated financing tier. The loan ceiling has been raised to Tk 80 lakh per individual, and the debt-equity ratio has been relaxed to 80:20 — down from the previous 70:30 requirement. This means a borrower can now finance up to 80 percent of an electric or hybrid vehicle’s cost through bank credit, with a down payment of just 20 percent. Bangladesh Bank cited rising per capita income, energy security priorities, and the growing demand for environmentally sustainable transport as the rationale for the preferential treatment of clean-fuel vehicles.
Personal Loan Ceilings Doubled
The revised framework also doubles the personal loan limits that have been in place for several years. Unsecured personal loans — those without collateral backing — are now capped at Tk 10 lakh, up from the previous limit of Tk 5 lakh. For loans secured by appropriate collateral, the ceiling has been raised to Tk 40 lakh from Tk 20 lakh.
Loans secured against liquid securities — such as FDRs, government bonds or other liquid instruments — remain exempt from these ceilings altogether, a provision that continues to give banks flexibility in structured collateral arrangements.
Bangladesh Bank noted that the consumer goods market has expanded significantly in recent years, driven by rising per capita income and consistent economic growth, and that the previous limits had become misaligned with prevailing market prices.
AT A GLANCE: What Changed
| Product | Previous Ceiling | New Ceiling | Debt-Equity Ratio |
| Auto Loan – Conventional | Tk 60 lakh | Tk 60 lakh (unchanged) | 60:40 |
| Auto Loan – Electric / Hybrid | No separate ceiling (Tk 60 lakh) | Tk 80 lakh | 80:20 (eased from 70:30) |
| Personal Loan – Unsecured | Tk 5 lakh | Tk 10 lakh | N/A |
| Personal Loan – Secured | Tk 20 lakh | Tk 40 lakh | N/A |
| Personal Loan – Liquid Security | No ceiling | No ceiling (unchanged) | N/A |
Growth Cap: A Prudential Safeguard Banks Must Not Miss
Embedded in the same directive is a constraint that risk and credit officers must register carefully. Bangladesh Bank has directed that the growth rate of a bank’s total consumer financing portfolio must not exceed the growth rate of that bank’s overall loan portfolio in any given period.
This is not a suggestion. It is a binding prudential requirement, intended to prevent consumer credit from ballooning disproportionately at banks that might be tempted to pursue retail volume at the cost of sectoral credit balance. Banks that expand their consumer books faster than their overall lending will be in breach of the directive. The instruction places an active monitoring obligation on credit risk and retail banking heads at every scheduled institution.
What Banks Must Do
The directive was addressed to the Managing Directors and CEOs of all scheduled banks and carries immediate effect — there is no phased implementation period. Banks must act on three fronts.
- Update product programme guidelines (PPGs) for all auto loan and personal loan products to reflect the new ceilings and revised debt-equity ratios. Retail and branch credit staff must be briefed without delay, particularly on the differential treatment of electric and hybrid vehicles versus conventional vehicles.
- Establish an internal mechanism — at credit risk or retail banking level — to monitor that consumer financing growth stays within the overall loan portfolio growth rate at all times. This requires a reporting line to senior management.
- Treat the circular as a full reset of the consumer financing framework — not a partial amendment. The 2004, 2017 and 2024 circulars are superseded in their entirety. Internal policy documents and credit manual references to those circulars must be updated.
Relationship managers handling retail clients should note that the Tk 80 lakh ceiling and the 80:20 debt-equity ratio represent a meaningful expansion in what can be structured for clients considering electric or hybrid vehicle purchases. This is particularly relevant as Bangladesh continues to face fuel supply pressure — a context that has accelerated interest in alternative-fuel transport among urban professionals. The preferential ratio on EV loans is a deliberate regulatory signal: Bangladesh Bank is treating clean-fuel vehicle financing as a priority segment, aligned with the broader national push on energy diversification.