Bangladesh Bank (BB) has issued new guidelines governing the establishment, relocation, and operation of bank business centres. The aim is to ensure balanced banking expansion, strengthen financial inclusion, and improve cost discipline across the banking sector. The directives, issued under Section 45 of the Bank Company Act, 1991 (amended through 2023), supersede the previous BRPD Circular No. 02/2023 and are mandatory for all scheduled banks.
The new guidelines classify bank business centres into three categories: Type-A (Administrative and Support Centres), Type-B (Transactional Branches), and Type-C (Specialised and Limited Service Centres). Banks must obtain prior approval from Bangladesh Bank before establishing or relocating any business centre, except for electronic booths, airport lounges, and temporary booths operating for less than one month.
The approval process involves two stages. Banks need policy approval by submitting an Annual Bank Business Expansion Plan by November 30 of the preceding year. Subsequently, they must obtain case-by-case final approval before commencing operations. Bangladesh Bank will grant approval for new urban branches only after banks fulfill their corresponding rural branch obligations.
To promote financial inclusion, at least 50 percent of all new branches established in a calendar year must be located in rural areas. Urban areas are defined as city corporations and 'A' category municipalities, while all other areas are considered rural. The guidelines also impose proximity restrictions, prohibiting banks from opening a new branch or sub-branch within a one-kilometre radius of their own existing outlet.
For sub-branches, the guidelines require that a maximum of 15 percent be located in city corporations, up to 25 percent in 'A' category municipalities, and at least 60 percent in 'B' category municipalities and rural areas. Sub-branches must operate with at least three employees and may not charge fees higher than those of regular branches. They are also prohibited from conducting foreign trade transactions.
The guidelines introduce stricter controls on infrastructure and operating costs. Banks are instructed to adopt austerity measures by limiting office space to actual business requirements, using environmentally friendly and locally manufactured furniture, and avoiding excessive interior expenditures. Banks must execute formal lease agreements, avoid abnormal rent increases during renewals, and limit advance rent payments. They will also be required to submit an annual statement on rent and lease rates to Bangladesh Bank.
Financial transactions at administrative centres and specified support and sales offices are prohibited. Any unauthorised business activities or establishment or relocation of business centres without approval will be treated as regulatory violations and will attract penalties under the guidelines and the Bank Company Act. Bangladesh Bank reserves the authority to inspect business centres and amend the guidelines whenever necessary to safeguard financial stability and ensure orderly expansion of the country's banking network.
