The central bank has directed other banks in Bangladesh not to buy vehicles worth over Tk 5 million and jeeps above Tk 10 million.
The banks will also not be permitted to use more than 5,000 sq ft to set up offices in the cities and 2,000 sq ft in rural areas.
A Bangladesh Bank circular sent to all heads of banks on Thursday said the move was aimed at curbing ‘unnecessary’ spending.
Bangladesh Bank said it had decided on the move following people’s criticism of the use of luxury vehicles by high-ranking bank officials and flashy bank branches.
The central bank said it was “particularly necessary” for banks to maintain austerity while spending in various sectors to retain depositor and equity holders’ confidence.
It argued that curtailed spending would help to increase the banks’ surplus and enhance their ability to compete by decreasing interest rates or charge or various fees.
Bangladesh Bank said it had recently noticed various banks’ buying luxury vehicles for their top officials and spending a huge sum to do up their offices.
“In order to discourage this trend, from now on, the banks cannot buy motor vehicles worth over Tk 5 million and jeeps worth over Tk 10 million,” the central bank circular said.
However, in case of transporting remittance, the banks can buy vehicles like those used by various security agencies.
But no vehicles can be procured by taking lease financing facilities from other banks or financial institutions.
The increase in the number of vehicles owned by the banks has to be consistent with their manpower and extension of their offices or branches.
The vehicles can be replaced every five years. Data regarding the use of the fleet and their expenditure has to be furnished at the half-yearly meetings of the bank boards and annual general meetings.
On avoiding high expense in decorating bank offices, the circular said the space for setting up new branches or transferring offices in the cities cannot exceed 5,000 sq ft. The space is 2,000 sq ft in rural areas.
While setting up new branches, no more than Tk 500 can be spent for each square foot and a maximum of Tk 1,000 can be spent for transferring bank branches.
The central bank said the directive would be effective from now, and added that other circulars issued on the matter in the past would stand cancelled.-bdnews24.com
