BRPD Circular Letter No. 28: Policy regarding establishment of business center by Banks

Banking Regulation and Policy Department Bangladesh Bank Head Office Dhaka. BRPD Circular Letter No. 28 Date: 13 Poush 1425 27 December 2018 Managing Director / Chief Executive All Scheduled Banks operating in Bangladesh Dear Sir, Policy regarding establishment of business centers by Banks

1. We would like to draw your attention to BRPD Circular No. 18, dated 29 November 2012, regarding the policy on the establishment of business centers by banks.

2. Through the aforementioned circular, the procedure for applying to Bangladesh Bank for the establishment, relocation, taking on lease or rent, and renewal of business centers by banks and companies has been described. The aforementioned circular includes bank branches, SME/Agriculture branches, Booths (Collection Booths and Electronic Booths), and Business Development Centers as business centers.

3. Now, in order to expand banking business in Bangladesh, deliver banking services to people deprived of banking facilities, and achieve greater financial inclusion through low-cost banking service outlets, "Banking Booths" have been included among business centers. Banking Booths will be operated under the following conditions:

3.1. "Banking Booth" means a low-cost business center operated under the control of any full branch of the bank to provide limited scope banking services in accordance with the policies and procedures periodically directed by Bangladesh Bank;

3.2. Banking Booths will be operated under the control of the nearby full branch;

3.3. Any convenient or appropriate name including "Banking Booth" may be used for the said business center;

3.4. Adequate security arrangements must be ensured for Banking Booths, and the booth establishment must remain under the bank's full control along with security;

3.5. The floor space of Banking Booths will be up to 1000 square feet;

3.6. At least 2 staff members must be appointed to operate the Banking Booths properly;

3.7. Banking Booths will be considered as low-cost banking service outlets. In this regard, the cost of establishing Banking Booths will not be more than the various cost limits prescribed for the establishment of regular branches, and the fees, charges, commissions, etc., for services provided at Banking Booths will not be more than the fees, charges, commissions prescribed for banking services provided by regular branches;

3.8. Any bank account opened by Banking Booths will be considered as an account of the controlling branch. In opening accounts, all existing rules and regulations including KYC must be followed properly;

3.9. All banking transactions of Banking Booths, including overall transactions, will be included in the Books of Accounts of the controlling branch;

3.10. Cash in Transit and Cash on Counter of Banking Booths must be fully insured. Vaults may be established for the preservation of cash and important documents at Banking Booths. If a vault is established, the security of the vault and insurance coverage of the preserved money must be ensured in accordance with BRPD Circular No. 07, dated 5 July 2015 and BRPD Circular Letter No. 08, dated 21 July 2016. It is mentioned that the vault of Banking Booths will be considered as the vault of the controlling branch;

3.11. All banking transactions of Banking Booths will be conducted through ATMs and customers must be provided with instant SMS and printed receipts;

3.12. The scope of banking services provided at Banking Booths and the upper limit of any transaction must be approved by the Bank's Board of Directors;

3.13. No foreign trade-related program can be conducted at such booths;

3.14. Banking Booths must be included in the bank's inspection program in accordance with Bangladesh Bank's ICC Guidelines and relevant directives;

3.15. Necessary arrangements must be made in accordance with existing rules and regulations to avoid Money Laundering risks;

3.16. Service hours of Banking Booths will be normal banking hours. However, with the prior approval of Bangladesh Bank and ensuring adequate security arrangements, banks may keep Banking Booths open at other times for the interest of their business and customer service;

3.17. To ensure uninterrupted banking services, Banking Booths must have adequate security-equipped information technology infrastructure;

3.18. A list of services provided at Banking Booths must be displayed in an easily visible place;

3.19. There must be adequate arrangements for customers to lodge any complaints, and lodged complaints must be resolved promptly;

3.20. The original approval certificate of Banking Booths or its certified copy must be displayed in a place where it is easily visible;

3.21. The signboard with the name of the bank, the name of the controlling branch, and the name including "Banking Booth" provided by the bank must be installed in an easily visible place outside the Banking Booth;

3.22. Special emphasis must be placed on financial inclusion in the establishment of Banking Booths;

3.23. No new Banking Booths can be opened, and existing Banking Booths cannot be relocated or closed without the prior approval of Bangladesh Bank. In the case of lease of establishment of Banking Booths, BRPD Circular No. 18, dated 29 November 2012 and directives issued by Bangladesh Bank from time to time will be applicable;

3.24. A Business Continuity Plan (BCP) must be kept to cope with any disaster/adverse situation; and

3.25. Bangladesh Bank reserves the right to cancel the approval of Banking Booths at any time without assigning any reason.

4. Establishment of new Banking Booths: For the establishment of Banking Booths, an application must be made to Bangladesh Bank for prior approval along with a copy of the Board of Directors' resolution in the specified format (Appendix 'C').

5. Relocation of Banking Booths: If there is a need to relocate Banking Booths, banks must apply to Bangladesh Bank for prior approval along with a copy of the Board of Directors' resolution in the specified format (Appendix 'D'). The approved booth must be relocated within 6 (six) months from the date of approval, otherwise the approval will be considered cancelled.

6. Closure of Banking Booths: If the need for closing any Banking Booth arises, an application must be made to Bangladesh Bank for prior approval through the Board of Directors' resolution. The reason for the closure of the Banking Booth must be explicitly mentioned in the application.

7. These instructions will come into force immediately.

Enclosure: 02 (Two) pages.

Yours faithfully, (Abu Farah Md. Naser) General Manager Phone: 9530252.

Appendix 'C' Information regarding establishment of Banking Booths

1. Name of the Bank-Company:
2. Number of existing booths: Banking Booth Collection Booth Electronic Booth
3. Address of the proposed booth (according to the table below): In the case of City Corporation/Municipality: Building Name (if any), Holding Number, Road Number (if any), Road Name (if any), Ward Number, City Corporation/Municipality, Thana, District. In the case of Union: Building Name (if any), Village/Area, Dag Number, Khatian Number, Mouza Name, Union, Thana, District.
4. Description of the area under the proposed booth: 4.1 Approximate extent of the area under (in square kilometers) 4.2 Name and distance of other banks' same type of booths established in the area under
5. Name and distance of the controlling branch:
6. 6.1 Is the selected building for the proposed booth suitable for booth establishment - Yes/No: 6.2 Is there any involvement of any director of the bank with the ownership of the selected building, if so, detailed description:
7. Description of building rent for the proposed booth: 7.1 Area of floor space 7.2 Monthly rent per square foot 7.3 Other charges 7.4 Amount of advance 7.5 Rate of rent increase 7.6 Tenure of rent
8. Potential manpower for the proposed booth:
9. Cost of opening the proposed booth: (Detailed item-wise breakdown of costs must be attached separately according to the table below) Serial No. Head of Expense/Description Amount of Expense (in Taka) Remarks
10. Description of security measures taken: (Security Guard/Armored Guard, CCTV, etc.) (Signature, Name, Seal of the Divisional Head)

Appendix 'D' Information regarding relocation of Banking Booths

1. Name of the Bank-Company:
2. Source and date of booth establishment approval:
3. Name and address of the booth (according to the table below): Current Proposed In the case of City Corporation/Municipality: Building Name (if any), Holding Number, Road Number (if any), Road Name (if any), Ward Number, City Corporation/Municipality, Thana, District. In the case of Union: Building Name (if any), Village/Area, Dag Number, Khatian Number, Mouza Name, Union, Thana, District.
4. Distance from the current building to the proposed building:
5. 5.1 Is the proposed building suitable for booth establishment - Yes/No: 5.2 Is there any involvement of any director of the bank with the ownership of the selected building, if so, detailed description:
6. Description of building rent for booth relocation: Current Proposed 6.1 Area of floor space 6.2 Monthly rent per square foot 6.3 Other charges 6.4 Amount of advance 6.5 Rate of rent increase 6.6 Tenure of rent
7. Manpower of the booth:
8. Cost of booth relocation: (Detailed item-wise breakdown of costs must be attached separately according to the table below) Serial No. Head of Expense/Description Amount of Expense (in Taka) Remarks
9. Reason for booth relocation:
10. Description of security measures taken: (Security Guard/Armored Guard, CCTV, etc.) (Signature, Name, Seal of the Divisional Head)