Job cuts on the rise in banks

With business activities facing a tough time amid the Covid-19 pandemic, some private commercial banks have reportedly opted for job cuts and forced resignations to reduce operational costs and restructure operations.

“The Financial Integrity & Customer Services Department (FICSD) of the Bangladesh Bank has received more reports of job termination and forced resignations from some banks during the pandemic,” a senior official of the central bank told The Business Post.

This prompted the central bank to conduct a probe into the issue among the respective banks, he added. However, BB is yet to confirm the actual number of terminations and job cuts that took place in the banking sector during the pandemic.

Under a directive from BB Deputy Governor Kazi Sayedur Rahman, the FICSD on Monday sent inspection teams to three private commercial banks – Brac Bank, Eastern Bank and Standard Bank – and also served them with a letter asking for explanations over complains of job cuts and forced resignations.

Several former Brac Bank officials, seeking anonymity, told The Business Post that more than 250 employees had lost their jobs since the pandemic began.

They also said that the bank termed these job terminations, which took place between April and August of last year, due to poor performance, non-extension of contracts, changes in job type and inability to acquire adequate skills after being employed at the bank.

“Terminations or job cuts in the banks are now part of its routine. Most employees are terminated or forced to resign citing weak reasons,” a former official said.

Brac Bank Managing Director Selim RF Hussain could not be reached over the phone for comments.

Meanwhile, rejecting the allegations, Standard Bank Managing Director Khondoker Rashed Maqsood said no one was terminated or forced to resign from the bank. However, some employees left citing personal reasons.

However, some officials were terminated due to specific reasons and audit reports against them.

Eastern Bank Managing Director and CEO Ali Reza Iftekhar said, “We did not ask any official to resign and no one has resigned from our bank.”

“The BB inspects our bank as part of its regular activity as the regulatory body,” he added.

“The Bangladesh Bank started a probe after receiving complaints of job termination and job cuts in those banks,” Bangladesh Bank Executive Director and Spokesperson Md Serajul Islam told The Business Post.

He added that in the past, many bank officials were reinstated after BB conducted similar inspections.

The central bank will also check other commercial banks for similar issues.

At the same time, some banks, including AB Bank and Jamuna Bank, had reportedly asked some of their employees to resign after the Covid-19 pandemic hit the country on March 8 last year.

Lastly, on July 25 this year, several officials of Jamuna Bank sent a letter to the central bank saying that they were being forced to resign from the bank.

“Jamuna Bank’s Human Resource Department called some of the bank’s officials over the phone and asked them to resign,” said the letter sent to the central bank.

A terminated official of the bank said forcing officials to resign is inhuman amid the national crisis created by the coronavirus when there are no new employment opportunities available.

Last year, AB Bank asked more than 80 of its employees to resign as part of its efforts to restructure operations.

The management of the bank said that unqualified and corrupt officials had been asked to resign.

“Termination and forced resignation are not logical in any way amid the difficult situation created by the pandemic,” said Salehuddin Ahmed, former governor of Bangladesh Bank.

Such decisions amid the pandemic are sending wrong signals to other sectors, he added.