Bangladesh Sets Maximum Bank Branch Rental Rates

Bangladesh Bank has announced maximum rental rates for bank branches and other business establishments, following requests from bank managing directors (MDs) and senior executives. The central bank’s directive allows banks to finalise rental agreements within the prescribed limits without seeking prior approval. However, if the rent exceeds the ceiling—or if the property is owned by a director or someone with a vested interest—central bank approval remains mandatory. The circular detailing these guidelines was circulated to all banks yesterday.

According to the directive, banks may now take decisions regarding leasing or rental agreements for new branches or the renewal of existing contracts based on approval from their own boards. The only exceptions requiring Bangladesh Bank’s prior authorisation are:

Properties where a bank director or a related party has ownership or interest

Premature relocation of business centres before the expiry of existing leases

Rent or lease agreements for head offices or divisions under bank control that fall outside prescribed limits

Banks must also adhere to prior instructions on advance payments, rental increase rates, and other related expenditures when entering into new agreements.

Maximum Rental Rates by Region

Bangladesh Bank has fixed maximum rent per square foot for various urban and rural categories. The rates consider city class, building location, floor level, and property quality.

Bank executives explained that the initiative aims to streamline leasing decisions amid increasing branch expansions and relocations, which often require lengthy central bank approval. Previously, several banks—including private sector institutions like BRAC Bank and City Bank—had applied for branch and head office rentals with Bangladesh Bank, but approval delays of up to nine months had slowed operations. In some cases, building owners leased the properties to other tenants, leaving banks at a disadvantage.

The new framework intends to simplify and accelerate the process for establishing and relocating business centres while ensuring transparency and compliance with maximum rental limits. It also empowers bank boards to negotiate leases without administrative bottlenecks, provided the property is free from conflicts of interest.

By setting region-specific ceilings, Bangladesh Bank ensures fair and reasonable rental charges that reflect local market conditions while supporting operational efficiency for the banking sector.

Sources: Bangladesh Bank Circulars, Bank Executive Statements