60% of bank sub-branches must be outside city corporations, municipal areas: BB

The central bank has instructed banks to set up at least 60 percent of their sub-branches outside city corporations and municipal areas.

“No sub-branch can be established below the distance of at least 1 km from the controlling branch,” the Bangladesh Bank said.

The banking regulation and policy department of BB issued the circular on Thursday and sent it to the top executives of the banks for immediate execution.

The circular stated that the lease agreement for sub-branch premises must be for a minimum period of three years and the rent cannot be raised by more than 15 percent during the period.

The approval of the Board of Directors or the Executive Committee of the banks should be obtained for setting up the electronic booths and this should be reported to the central bank within 15 days of setting up booths.

Apart from this, the banks were instructed to follow the rules applicable to the branch regarding the cost of setting up these booths and the rent.

The BB also made some changes in the definition of Palli (Rural) and urban branches of banks.

Discipline will be established in banking operation and operation cost will be minimised following the instructions, sector insiders said.

Besides, directors and the influential people force banks to pay higher rent by setting up branches, sub-branches, or ATM booths on their own properties and buildings. This tendency will be reduced following the specific guideline of BB in this regard, they said.