Circulars/Notifications - Banking Policy & Regulations Department  
 BPRD Circular Letter No. 29 of 2021
September 23, 2021

The Presidents/Chief Executive Officers
All Banks/DFIs.

Dear Sirs/Madams


Please refer to BPRD Circular No. 10 dated August 03 2016, whereby revised Prudential Regulations for Consumer Financing (PRCF) were issued.

2. It has been decided to make the following amendments in Prudential Regulations for Consumer Financing:

  1. Regulation R-3 (Total Financing Facilities to be Commensurate with the Income): The total monthly amortization payments of consumer financing facilities, as prescribed in paragraph 1 of the regulation, should not exceed 40% of the net disposal income of the prospective borrower. Similarly, in paragraph 3 of the regulation Debt Burden Ratio for Consumer Financing may be read as 40 percent instead of 50 percent.

  2. REGULATION R-11 (Auto Loans/Financing):

    Maximum tenor: The maximum tenure of the auto finance facility is reduced from seven (7) years to five (5) years.

  3. REGULATION R-12 (Auto Loans/Financing): The minimum down payment is increased from 15 percent to 30 percent of the value of vehicle. The existing paragraph of the regulation has been numbered as paragraph 1 with title: “minimum down payment requirement” and a new paragraph 2 with title “Limit on Auto Financing” has been inserted as follows:

    2. Limit on Auto Financing: Overall auto loans/financing limits availed by one person from all banks/DFIs, in aggregate, shall not exceed Rs3,000,000/-, at any point in time. However, the financing limit of borrowers whose approved limit already exceeds Rs3,000,000/- may be amortized as per existing terms and the same shall not be further increased.

  4. REGULATION O-7 (Auto Loans / Financing): Following sentence has been inserted at the end of existing regulation O-7:

    “New as well as used imported vehicles shall not be eligible for auto financing from banks/DFIs”

  5. REGULATION R-17 (Personal Loans/Financing): The maximum tenure of personal financing, except the financing extended for educational purpose as prescribed in the regulation, is decreased from five (5) years to four (4) years.

3. The aforesaid amendments in PRCF will not apply on i) financing for locally assembled/manufactured vehicles of up-to 1000cc engine capacity ii) Roshan Apni Car product of banks and iii) locally assembled/manufactured Electric Vehicles. Accordingly, these financings will continue to be governed by PRCF existing prior to these amendments. Besides, the regulatory treatment of Roshan Apni Car product already communicated to RDA participant banks will continue to remain effective.

4. The above amendments in PRCF shall be applicable, with immediate effect, on new financing facilities. All other instructions on the subject shall, however, remain unchanged.

5. Please acknowledge receipt.

Yours truly,


(Muhammad Akhtar Javed)

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