05/05/2026
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 person for such purchases, in a move that appears to support the countryās shift toward cleaner transport.
In a circular issued today, the central bank said the new ceiling includes insurance costs and applies only to electric and hybrid vehicles. Loans for conventional vehicles will remain capped at Tk 60 lakh.
BB also revised personal loan limits. Borrowers can now take out unsecured personal loans of up to Tk 10 lakh, up from Tk 5 lakh. For loans backed by proper securities, the limit has been raised to Tk 40 lakh from Tk 20 lakh. Loans secured against liquid assets will remain outside this cap.
The central bank also instructed banks to ensure that consumer loan growth does not outpace overall loan growth, a measure aimed at preventing excessive retail lending.
The new rules replace earlier circulars issued in 2004, 2017, and 2024, and took effect immediately under the Bank Company Act, 1991.
Alongside the higher loan limits for EVs and hybrid cars, BB also relaxed equity requirements for green vehicle financing. While conventional auto loans still require a 60:40 debt-equity ratio, buyers of electric and hybrid vehicles can now borrow on an 80:20 ratio, reducing the required down payment.
The regulator said the changes reflect rising vehicle prices and growing demand for cleaner, more energy-efficient transport.
The circular follows the cabinetās recent approval of broad duty exemptions on imports of brand-new electric buses and trucks, signaling a coordinated push toward greener transport.
Under that decision, all customs duty, regulatory duty, supplementary duty, advance tax, and advance income tax on new electric buses with at least 17 seats will be waived, leaving only 15 percent VAT, except for buses used for student transport, which will be fully exempt.
Similar exemptions will apply to new electric trucks with a capacity of five tons or more.
The policy shift comes as Bangladesh faces a fuel crunch caused by supply disruptions linked to the US-Israeli war on Iran. At the height of the crisis, long lines of vehicles stretched for more than 10 hours outside fuel stations. As the country relies heavily on imported fuel oil, energy diversification has become a major policy priority.
Passage-Based SAT Questions by Bright Prep
1. Main Idea
Which choice best states the main purpose of the passage?
A. To describe rising fuel prices in Bangladesh
B. To explain new banking and tax policies promoting electric vehicles and related economic goals
C. To compare electric and conventional vehicles in Bangladesh
D. To criticize Bangladeshās dependence on imported fuel
2. Detail Question
According to the passage, what is the new maximum auto loan limit for electric and hybrid vehicles?
A. Tk 40 lakh
B. Tk 60 lakh
C. Tk 70 lakh
D. Tk 80 lakh
3. Inference Question
The reduced equity requirement (80:20 ratio) for EV loans most likely aims to:
A. Increase bank profits from vehicle loans
B. Make electric and hybrid vehicles more financially accessible
C. Restrict purchases of conventional vehicles
D. Reduce overall consumer lending in the economy
4. Vocabulary in Context
In the passage, the word ācappedā most nearly means:
A. increased
B. limited
C. removed
D. encouraged
5. Function Question
Why does the passage mention the fuel crunch and long lines at fuel stations?
A. To show why EV imports have decreased
B. To explain why consumer loans were reduced
C. To provide context for why energy diversification policies are being prioritized
D. To criticize previous banking regulations
6. Detail Question
Which of the following is NOT part of the governmentās duty exemptions for electric buses and trucks?
A. Customs duty
B. Regulatory duty
C. Value-added tax (VAT) exemption for all vehicles
D. Advance income tax
7. Inference Question
Which statement best reflects the relationship between banking policy and government action described in the passage?
A. The two are unrelated and developed independently
B. Banking policy is tightening while tax policy is loosening
C. Both policies are aligned to encourage greener transportation
D. Government policy discourages bank participation in EV financing
8. Purpose Question
Why does the author mention previous circulars from 2004, 2017, and 2024?
A. To show that the new policy is a minor adjustment
B. To highlight that the new rules replace older regulatory frameworks
C. To compare different political administrations
D. To show inconsistency in Bangladesh Bank decisions
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