Bangladesh Bank plans to water down its rules on branch opening for new banks, which seek to open more outlets in major cities to accelerate business.
The number of rural bank branches will have to be a minimum of 50 percent of the total branches approved in a year, according to BB guidelines.
But the nine new banks urged the BB to allow them to open more branches in cities such as Dhaka and Chittagong.
“We will consider their proposal on a case-by-case basis,” said SK Sur Chowdhury, deputy governor of BB, after a meeting with chairmen and chief executives of nine new banks at the central bank. Governor Atiur Rahman chaired the meeting.
Chowdhury said the banks have been asked to properly manage risks and not lend aggressively, and also follow the regulator's rules on the single borrower exposure limit and the responsibilities of the board and management.
But new banks urged the BB to allow them to open branches first in the cities, which are the country's business hubs.
“As a new bank, we want the BB to allow us to open at least two branches in urban areas against one in rural for the sake of business,” Mizanur Rahman, managing director of Modhumoti Bank, told The Daily Star.
Abdul Quddus, managing director of NRB Global Bank, said banks' profits come from the urban branches.