Bank of Maharashtra Lease Row: Actual Rental Far Lower Than Initial Media Claims

Bank of Maharashtra’s Baner lease has drawn attention after reports suggested high financial exposure. However, documents indicate the total rental is significantly lower, with flexible terms and expansion-driven planning.

Pune: Recent media reports alleging financial irregularities and projecting a liability of over ₹1,100 crore in connection with the leasing of office space at Montclaire, Baner, by Bank of Maharashtra appear to be significantly overstated, according to details emerging from lease documents and sources familiar with the transaction.

As per available information, inputs suggesting a rental outflow of around ₹1,116 crore over a 15-year period reportedly attributed to claims by Vinod Gannu, a partner in Konbil Landmark-were based on extrapolated calculations and interest assumptions rather than actual lease terms. In contrast, the executed lease indicates that the total rental outflow over the full tenure is approximately ₹406 crore, plus applicable taxes. This suggests that initial figures circulating in sections of the media may have misinterpreted the financial scope of the deal.

Sources indicate that the bank’s existing Lokmangal office in Pune continues to operate at full capacity and has not been vacated, with over 400 employees currently working from the premises. The Montclaire facility has been leased to support expansion driven by sustained growth in operations, rather than as a relocation.
Over the past three years, the bank has added more than 4,000 employees nationwide, with further hiring planned. Sources said the current office building, which is over four decades old, has no scope for expansion. Additionally, civic developments such as road widening have impacted available space, and the Pune Municipal Corporation had issued notices in the past regarding such changes. The existing premises also lack adequate training infrastructure. These factors, along with past challenges related to infrastructure development, are understood to have influenced the decision to lease additional office space.

Under the agreement, the bank has leased approximately 1.16 lakh square feet of usable carpet area at a monthly rent of about ₹1.77 crore (exclusive of GST) for the initial five-year period. The lease provides for a 25% escalation in rent for the subsequent five-year blocks (years 6 -10 and 11-15), with the total tenure extending up to 15 years. However, the agreement does not include a lock-in period and allows the bank to terminate the lease with a three-month notice. Market sources indicate that comparable commercial properties in the same vicinity command higher rentals.

This structure significantly limits financial exposure, with the bank’s effective liability at any point restricted to approximately ₹5-6 crore equivalent to three months’ rent. The premises have also been acquired under a plug-and-play model, meaning no capital expenditure has been incurred by the bank, which pays only for operational usage.
Regarding concerns over area calculations, sources confirmed that the carpet area has been determined through joint measurement exercises and certified by architects, in line with tender conditions.

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