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Customer Rights - GB rent policy 2017-18

The details of the Policy are furnished hereunder:

Mode of selection:

Branch Manager / officer in charge at Head Office/Regional Office will be in the normal course, initiate the proposal inviting offers for premises on lease.  

a. Metro/Urban centers.

With regard to Metro / Urban centers, proposal inviting offers for premises on lease be called for by notifying in two local leading News papers one in Telugu and another in English. Such offers will be called for strictly from owners/ landlords only.  Offers from brokers / agents should not be entertained.  Offers should be called for, in two-bid system viz. Technical Bid and Price Bid for proposals of premises.  Procedure to be followed in case of two bid systems is that the technical bid should contain details such as location, built up area, carpet area, specification of the building, details of the offerers/ landlords, etc., and the price bid should contain only the rent quoted and other financial terms.

The proformae for advertisement in News Papers and proformae for technical bid and price bid are enclosed as Annexure-I to Annexure-V. (All these proformae are placed in our Bank’s website.)

On receipt of the offers, technical bids are to be opened by the Premises Committee and a comparative statement is to be prepared by the officer initiating the proposal.  The Premises Committee should evaluate the eligible offers received and shortlist them, depending upon the suitability with regard to specifications, location, business potential, etc., for inspection.  On inspection of the short listed offers, the Premises Committee to record its recommendations by way of a report.  The price bids of such offers should be opened in the presence of Premises Committee as well as landlords who should be informed well in advance.  The negotiations would be held with the prospective land lords for reduction of rate of rent, modifications in lease terms, if any.  The Premises Committee has to prepare a comprehensive report thereafter which should contain the details of all the offers with due recommendations for selection of the specific premises.

i.          The price bid of all the unsuccessful bidders should be returned in sealed condition.

ii.          In the event the lowest bidder backs out, the offers should be invited afresh.

iii.         The tenders/bids should be opened at the stipulated date and time as detailed in the advertisement.

iv.         No advertisement is required where the transaction is between PSU to PSU, Government to Government, Government to PSU.

v.          The advertisement for offer of premises should be in the Bank’s website for a minimum period of 15 days.

vi.         In case of ATMs, the advertisement in the Bank’s web site should be for a minimum period of 10 days.


b. Semi-Urban /Rural centers:

In respect of Semi-Urban / Rural centers all the bids are to be opened. All the offers to be inspected and the prospective land lords having suitable premises will be called for discussion / negotiation prior to finalization of the premises. The premises committee has to prepare a comprehensive report thereafter which should contain the details of all the offers with due recommendations for selection of the specific premises.

2. Brokerage:

Where the advertisement does not yield the desired results, the services of brokers can be enlisted and the brokerage charges may be paid, in exceptional cases, i.e. one months rent excluding taxes and other outgoings, only with the prior approval of the appropriate authority.

3. Location:

Utmost importance has to be given to the business factor and customer convenience. The premises to be hired shall be located in prominent business locality. The premises of the branch shall be located preferably on the ground floor and if it is not possible, it shall be on the first floor. The entire requirements preferably may be in one floor and it shall not be more than two floors. The administrative offices may not be located in a busy commercial area but shall be located in less congested locality at a center where the rentals are moderate.

4. Formation of premises committee:

The premises committee shall be constituted in the following manner. The committees are for selection of new premises renewals of existing premises surrender of premises and also for shifting of premises.

  Premises Committee at Head Office

           1. Chairman                                        - Chairman

          2. General Manager (Admin & IT)          - Member

          3. General Manager (Ops & CR)             - Member

          4. Chief Manager (Plg & Dev)                 - Member

          5. Chief Manager at Head office             - Member (to be identified by the  Chairman)

Premises Committee at Regional Office                     

  1. Regional Manager                         - Chairman of the Committee.
  2. Administrative Officer (GB)            - Member
  3. Deputy Manager at RO                  - Member (to be identified by Chairman)
  4. Local Branch Manager                   - Member ( to be identified by GM(Ops & Cr))

Premises committee at Regional Office will select the premises for Regional Offices and branches under their control.

For Scale-IV Branches as under

  1. Regional Manager (Local RO)           - Chairman
  2. Chief Manager (Branch)                    - Member
  3. Administrative Officer (GB)( RO)      - Member
  4. Branch Manager (Local Branch)        - Member to be identified by GM (Ops & Cr)                                               

Premises committee for Scale-IV branches will select the premises for branch

 5. Measurement of Area :

In respect of existing premises, particularly in the Metro and urban centers where the Bank has not specified the areas specifically as carpet areas, the Bank will continue to pay the rent as specified in the original agreement / consent letter or give the benefit to landlord for measuring exact carpet area and proportionately increase the rent so that as a result of new method of measurement, it does not reduce the rentals.

However, in all new proposals, rent should be computed on carpet area basis, factoring the rental element of super built up area, if so warranted. The carpet area shall be measured and specified.

As regards to the Rural and Semi-urban areas, the rentals should, as far as possible, be negotiated for lump sum amount instead of on sq. feet basis.


 If the parking is a pucca RCC construction and covered on the three sides, a separate rent should be finalized for the parking area depending upon local practice and offer received.

7.Rent for Strong Room :

Separate rate should not be fixed for strong room but it should be factored in fixation of rent on carpet area for the branch premises, in respect of Metro and urban centres.

8.Taxes :

All taxes as applicable to the area are to be paid by the respective landlord.

9.Service Tax:

For proposals attracting service Tax, the same, wherever applicable, will be paid by the Bank as per the Bill.

10. Service charges (including maintenance charges):

Payment of service charges to the landlords should be for the specific facility provided by the landlord such as lift, generator, furniture and electrical gadgets. The landlord may be given the benefit of splitting the rent into rent & amenities in the following cases.

i.          Electrical fixture like fans, tube lights, air conditioners etc.

ii.          Standby Generator

iii.          Lift facility.

iv.          Free car parking slots.


11.Advance to Landlords:

No advance should be granted to landlords for construction purpose in case of buildings for own use.

Whenever loan is granted for the proposed building / alterations, etc., will be as term loan subject to the following conditions:

  1. The quantum of loan shall not exceed 75% of the cost of construction / additions / alterations, etc.
  2. 75% of the proposed rent shall be adjusted towards liquidation of loan with interest or
  3. c.     The maximum period of repayment of loan with interest shall be limited to seven years/ to the period of the lease.


12. Interest on advances:

Interest should be charged on advances granted to landlords as per loan policy of the Bank.  However, the interest rates advised to the landlords at the time of sanction will remain unchanged throughout the period/ currency of loan and interest will be charged at monthly rests.

13. Rental Deposits:

When Bank finances landlords for construction / renovation of the premises no deposit of rent (interest free) should be made with the landlords.  In other cases, wherever interest free advance rent / rent deposit is demanded by the landlords, this should be restricted to 3 months rent at rural and semi urban centers and 6 months rent at urban and metro centers. 

14. Period of Lease:

The lease should be for a minimum period of 5 years with an option to renew for further 10 years in favour of the Bank i.e. total 15 years with predetermined rate of increase in rent for the first 5 years and negotiated rent for the remaining period.  If it is not possible to extend the lease on reasonable terms and conditions, the premises should not be vacated unless suitable accommodation is available particularly in cases where protection is available under tenancy laws.  The lease agreements should provide for a clause for further renewal of the period with suitable escalation in the rent, with mutual consent of the Bank and the landlord.

15. Enhancement of Rent on Expiry of Lease:

Normal enhancement in rent will be 25% for every 5 years and 15% for every 3 years which can be approved by the authority approving the monthly rent.  Any enhancement beyond the said limits should be approved by an authority one step higher than sanctioning authority.  Further, though the lease can be for 5 years, enhancement in rent can be after every 5 or 3 years on a case to case basis depending on the merits.

However, necessary clause should be incorporated in the lease deed that the landlord should take up colouring of the premises and routine maintenance at the time of every periodical enhancement of rent.

16. Renewal of Lease Agreement:

The process of lease renewals should be taken up atleast 6 months in advance before the expiry date.

17. Registration of Lease:

It is desirable to have the lease deed registered and the expenses on account of this be shared between the Bank and the landlord, preferably on 50:50 basis.  In instances where the landlords are disinclined to have the lease deed registered, the Bank has an option to continue the stamped lease agreement or get the deed registered.

18. Surrender / Shifting of Premises:

As far as commercial premises are concerned, keeping in view the long term requirements, such vacation is not generally called for the Bank may actively seek to protect itself from eviction by taking advantage of extant laws in this regard.  It would be prudent on the part of the Bank to ensure that lease agreements are extended well in time so that landlords do not have a grievance that despite termination / expiry of lease agreement, Bank continues to keep such premises for a long period.  A commercial property has great site value, and if the Bank decides to vacate such commercial property, it could explore the possibilities of availing compensation from the landlord.

As regards the decision for shifting / surrender of premises, this being a sensitive issue, it should be decided by the Premises Committee at Head Office.

19. Additional Space: 

In case an additional space is being taken from the same Landlord in the existing premises with the same municipal number, a committee consisting of Branch Manager and Controller will recommend to the appropriate authority for approval of additional rent and the rent of such acquisition should be reasonable but not exceeding the rate fixed for the old premises and the additional area proposed to be acquired should not be more than 25% to 30% of the existing area. For acquisition of higher area, regular Premises Committee is required to be formed as per laid down procedure.

However, if the additional accommodation bears a different municipal number the entire proposal has to be treated as a separate premises and the laid down procedure has to be followed.

20.Reporting of Transactions to CBI:

All the transactions of Rs.25.00 lakhs and over, involving grant of advances to and keeping of rental deposits with landlords of premises taken for the Banks on lease / rental basis, should be reported to the Central Bureau of Investigation as required vide para 3 of RBI Circular DBOD No. BL.BC.82/C/168 (01) /83 dated 17.10.83.


21. Grievances Committee:

In order to deal with the genuine grievances of the landlords expeditiously, it was proposed to constitute Grievance Committee as under: 

            1. Chairman                                        - Chairman

            2. General Manager (Admin & IT)        - Member

            3. General Manager (Ops & CR)           - Member

            4. Chief Manager (Plg & Dev)              - Member

The fact that such a forum / committee for redressing the grievances exists should be made known to the landlords in the letters issued at the time of taking the premises on lease.  It should also be made clear to them that the decision of such a committee shall be final.

22. Deviations:

All the proposals which are in deviation from any of the above guidelines should be referred to the Premises Committee at Head Office, comprising of Chairman, General Manager (Admin &IT), General Manager (Ops & CR) and Chief Manager (Plg & Dev) and one more Chief Manager at Head Office( to be identified by Chairman) for consideration and necessary approval.