BB sets ceiling for banks’ office space rent

Bangladesh Bank (BB) has allowed banks to rent office space for branches and other business centres without prior approval from the central bank, provided the rent remains within a ceiling set for different regions.

According to a circular issued by the central bank today, banks operating in Bangladesh can decide on renting or leasing premises for business centres, signing new agreements, and renewing existing contracts with the approval of their own boards of directors, without seeking prior permission from the regulator.

However, the facility will apply only if the rent remains within the maximum limit specified by the central bank depending on location.

Under the revised ceiling, the maximum rent per square foot has been fixed at Tk 104 in Dhaka, Tk 61 in Chattogram, Tk 34 in Rajshahi, Tk 40 in Sylhet, Tk 34 in Khulna, Tk 45 in Rangpur, Tk 48 in Barishal, and Tk 36 in Mymensingh for locations within city corporation areas.

For municipalities and rural areas, the allowable rent ceilings are lower.

Banks must inform the central bank within 10 working days of signing any rental agreement under this provision, the circular said.

The central bank stated that the move aims to simplify and speed up the process of establishing or relocating bank business centres, as the number of branches and relocations has increased in recent years.

However, prior approval from Bangladesh Bank will still be required in several situations, including when the rent exceeds the specified ceiling, when there is a conflict of interest between the building owner and bank directors or related parties, when a branch is relocated before the expiry of an existing rental contract, and when premises are rented for the bank’s head office or its controlling departments.

The circular also instructed banks to follow the relevant provisions of the Bank Company Act when establishing or relocating business centres.