BRPD-1 Circular Letter No. 08: Policy Regarding Establishment of Banks' Business Centers & Their Rent/Lease Related Issues

Bangladesh Bank Head Office Motijheel, Dhaka-1000 Bangladesh. Ref No.: BRPD-1 Circular Letter No. 08 Date: ------------------- 19 Falgun 1432 Managing Directors / Chief Executive Officers All Scheduled Banks operating in Bangladesh. Dear Sir, Policy Regarding Establishment of Banks' Business Centers & Their Rent/Lease Related Issues.

Reference is invited to BRPD Circular No. 02/2023 on the subject cited above. Instructions regarding the procedures for the establishment of banks' business centers and rent/lease matters were provided in the aforementioned circular. Due to the increasing number of bank business centers and the increasing frequency of shifting from one location to another upon the expiry of lease agreements, Bangladesh Bank has taken several initiatives to facilitate and expedite the approval process for rent/lease acquisition related to the establishment and relocation of business centers. In this context, in addition to the instructions listed in serial numbers 7.0 to 7.5 of BRPD Circular No. 02/2023, the following instructions are hereby provided:

1. All banks operating in Bangladesh may, subject to the approval of their respective Bank's Board of Directors, make decisions to acquire rent/lease for business centers, execute new agreements, and renew expired agreements without prior approval from Bangladesh Bank. However, the following conditions shall apply in this regard:

a) In the case of acquiring rent/lease without prior approval from Bangladesh Bank, the maximum rent/lease rate per square foot shall be as follows by region:

Sr. No.	Divisions	Maximum Rent/Lease Rate (Tk/sq ft)
		Contract Execution
		Within 10 days of contract execution, banks must inform the Banking Regulation and Policy Department-1.
1	Dhaka	104.00 28.00 24.00
2	Chittagong	61.00 27.00 20.00
3	Rajshahi	34.00 25.00 13.00
4	Sylhet	40.00 22.00 16.00
5	Khulna	34.00 21.00 13.00
6	Rangpur	45.00 17.00 13.00
7	Barishal	48.00 20.00 14.00
8	Mymensingh	36.00 19.00 14.00

b) In such cases of acquiring rent/lease, the instructions listed in BRPD Circular No. 02/2023 regarding the determination of advance payment, business center establishment costs, rent increase rates, and other matters shall be followed.

c) Furthermore, considering differences in building location, floor location, building construction standards, etc., the building rent/lease rate shall be reasonably determined within the aforementioned maximum limits, and approval from the respective Bank's Board of Directors shall be obtained for this matter.

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2. In cases where the rent/lease for business centers is determined at a rate exceeding the limits listed in serial number 1(a), prior approval from Bangladesh Bank shall be obtained.

3. Even if the building rent/lease rate falls within the maximum limits listed in serial number 1(a), prior approval from Bangladesh Bank shall be mandatorily obtained in the following cases:

a) When the owner of the selected building has a conflict of interest with the Bank's Director(s) or persons associated with the Director(s); b) When relocating the Bank's business center before the expiry of the current lease agreement; c) When acquiring rent/lease for the Head Office and its controlled departments.

4. It is specifically mentioned that the instructions listed in Section 32 of the Bank Companies Act 1991 (amended up to 2023) regarding the establishment and relocation of business centers shall be followed.

These instructions are issued under the powers granted by Section 45 of the Bank Companies Act 1991 (amended up to 2023) and shall come into force immediately.

Yours faithfully, (Gazi Md. Mahfuzul Islam) Director (BRPD) Phone: 9530252