Banks can now spend more on business centres

The Bangladesh Bank has allowed banks to increase their per square foot furnishing and equipment costs by Tk 150 to a maximum of Tk 2,000 for setting up new business centres.

These costs are exclusive of IT equipment and air conditioners.

In a circular on Thursday, the central bank announced the new policy titled, “Policy regarding setting up and rent/lease of business centres of banks,”

and cancelled the previous one. Previously, banks could spend Tk 1,850 for this purpose.

The policy added that in case of business centre relocations, banks will be able to spend Tk1,400 per square foot on furnishing and equipment, an increase from the previous figure of Tk 1,250.

Besides, the Bangladesh Bank also updated the guidelines regarding advance payment of renting spaces. A building/floor space cannot be rented for a period of more than 20 years. In case of a 4-year agreement, paid advance cannot be more than the sum of 12 months of rent.

In case of less than 4 to 9 years rental agreement, advance cannot be more than the sum of 24 months of rent. For a contract of 9 years or more, the rent equivalent of more than 36 months cannot be paid in advance.

The issue of evening banking has been newly added to the policy. The circular states that evening banking cannot be more than 2 hours after bank office hours, and only deposits will be eligible during this time. Aside from deposits, there will be no banking transactions.

Also, in the new policy, the requirement of taking prior approval of Bangladesh Bank’s has been abolished for setting up ATM booths. However, the approval of the Board of Directors is required for making such a move.

If any area is newly declared as a city corporation area, the branch of this area will be considered as a city branch, the circular reads.

The SME/agriculture branch of a bank should be set up outside the divisional town and city corporation areas. Fifty per cent of the deposits in these branches should be disbursed as loans to the SME/agriculture sector of the respective areas.