B Mirror Report : City Bank has decided to purchase land at twice the market price, disregarding the interests of capital market investors and depositors. This decision has sparked rumors of massive waste and corruption.
Since the bank is spending from depositors’ funds, the risk to deposits will increase, and the bank’s operating expenses will rise, reducing its share of profits. This has caused concern among investors.
Due to this decision, small shareholders may miss out on expected dividends. Moreover, the bank’s reduced profits due to overspending could lead to lower tax contributions, depriving the government of expected revenue. Despite these concerns, the bank’s management is moving forward with the controversial plan.
It has been reported that City Bank has already obtained Bangladesh Bank’s approval to construct a 28-story headquarters on 40 katha of land in Gulshan, Dhaka. To build the new building, the bank is purchasing an additional 20 katha of land adjacent to the previously owned 20 katha on Gulshan Avenue. The total cost, including land acquisition and associated expenses, is expected to reach Tk 3.45 billion.
However, there are allegations that the bank is paying much higher than market price for this land. The new 20 katha being purchased will cost approximately Tk 17–18 crore per katha, which is considered excessively high. Locals note that the price of this land should not be so high, and real estate experts warn that purchasing at this inflated rate could impact neighboring properties. Critics have already raised questions about why City Bank is paying such a premium.
Currently, commercial land on Gulshan Avenue is being traded at around Tk 8 crore per katha, but City Bank is paying Tk 17.25 crore per katha for the new plot.
Senior Supreme Court lawyer Ahsanul Karim said, “If land is purchased above market price, there is a scope to investigate whether any illegal benefit was sought. One can check whether the seller actually received that money, what the real price of the land should have been, and whether any corruption took place.”
The total cost for constructing the 28-story building on 40 katha of land, including the newly purchased 20 katha, is estimated at Tk 8.55 billion. The overall projected expenses for land purchase and construction now total Tk 12 billion. The bank has already obtained the necessary approvals from RAJUK (Capital Development Authority) and Bangladesh Bank.
In the latest board meeting on Wednesday, City Bank’s board approved the construction of the new headquarters and the purchase of an additional 20 katha of land.
City Bank was established in 1983 by 12 prominent businesspeople and was listed on the stock exchange in 1986. The bank began operating from its first own building in 2009—a 20 katha, 8-story headquarters on Gulshan Avenue near Gulshan-2. Due to space constraints, the old building is being replaced with a 28-story structure.
As a listed company, City Bank’s decision to purchase land and construct a building at such a high cost is price-sensitive, potentially affecting investor interests and stock prices. The bank has disclosed this information to the capital market, but questions remain whether shareholders will suffer due to reduced profits caused by overspending.
Bank sources report that Bangladesh Bank approved the land purchase and construction on January 6. The board finalized the decision in their recent meeting. RAJUK has also granted approval to construct the 28-story building, with five floors allocated for parking and 23 floors for the bank’s headquarters operations. With the increased land area, there is now scope to expand the building’s height and footprint.
City Bank’s Managing Director and CEO, Masrur Arefin, told the media: “Bank buildings and offices worldwide are often very aesthetic and impressive. We also want to set a similar example in Bangladesh’s banking sector. We are grateful to Bangladesh Bank for approving our plans and initiatives. We aim to complete our headquarters and start operations there as soon as possible.”
