Bangladesh Bank has introduced maximum rental rates for bank branches and other business premises, responding to repeated appeals from managing directors (MDs) and senior executives across the banking sector. The new directive allows banks to finalise rental agreements within the prescribed ceilings using board approval alone, removing the need for prior authorisation from the central bank. However, central bank approval remains mandatory if the rent exceeds the ceiling or if the property is owned by a bank director or an individual with vested interests. The circular outlining these guidelines was officially circulated to all banks yesterday.
Key Provisions
Under the new framework, banks can now take decisions regarding the leasing or renewal of branches and business centres with the approval of their boards. Exceptions requiring Bangladesh Bank authorisation include:
Properties owned by a bank director or related party
Premature relocation of business centres before the expiry of existing lease contracts
Rent or lease agreements for head offices or divisions that exceed the prescribed maximum rates
Additionally, banks must continue to follow existing instructions related to advance payments, rental increases, and other related expenditures when entering into new agreements. This ensures both compliance and transparency while offering greater flexibility in operational decision-making.
Maximum Rental Rates by Region
Bangladesh Bank has set region-specific maximum rent per square foot, reflecting local property markets, building quality, floor level, and city classification.
| City / Area | Maximum Rent per sq. ft (Taka) | Category / Area Type |
|---|---|---|
| Dhaka City Corporation | 104 | Urban core |
| Dhaka ‘A’ Class Municipality | 28 | Suburban / municipal |
| Dhaka Rural Areas | 24 | Village / peripheral |
| Chittagong City | 61 | Urban core |
| Chittagong ‘A’ Municipality | 27 | Suburban |
| Chittagong Rural Areas | 20 | Peripheral |
| Rajshahi | 34 / 25 / 13 | City / municipal / rural |
| Sylhet | 40 / 22 / 16 | City / municipal / rural |
| Khulna | 34 / 21 / 13 | City / municipal / rural |
| Rangpur | 45 / 17 / 13 | City / municipal / rural |
| Barisal | 48 / 20 / 14 | City / municipal / rural |
| Mymensingh City | 36 / 19 / 14 | City / municipal / rural |
Streamlining Leasing Approvals
Bank executives emphasised that the new policy aims to simplify leasing decisions amid growing branch expansions and relocations, which previously required lengthy central bank approvals. Several private banks, including BRAC Bank and City Bank, had previously faced delays of up to nine months when seeking permission for branch or head office rentals. These delays sometimes allowed property owners to lease the same buildings to other tenants, creating operational hurdles for banks.
By allowing board-level approval within prescribed ceilings, the initiative empowers banks to finalise leases quickly while ensuring adherence to fair and reasonable rental rates. It also facilitates the efficient relocation of business centres and reduces administrative bottlenecks, provided there is no conflict of interest.
Supporting Operational Efficiency
The move is intended to maintain transparency, reduce unnecessary delays, and support the rapid expansion and optimisation of bank networks across the country. By establishing region-specific ceilings, Bangladesh Bank ensures rental charges are aligned with market realities while giving banks the flexibility to make timely operational decisions.
Bank executives noted that the directive is particularly significant as the sector experiences an increasing number of branch relocations and expansions. It is expected to enhance service delivery, reduce operational risks, and strengthen governance over property expenditures.
Sources: Bangladesh Bank Circulars, Bank Executive Statements