Public sector bankers enjoy incentive bonus flouting rules

The state-owned banks have been offering incentive bonus to their employees even amid the poor financial health – a clear violation of rules formulated more than six years back.

As per the rules, banks would not be able to pay incentive bonus considering their weak financial health and liquidity on the basis of net profit.

Even more than six years have passed since the rules were made, but they are hardly being followed by the public sector banks, according to a central bank letter issued to the FID on June 20.

The Financial Institution Division (FID) of the Ministry of Finance on Monday asked the state-run banks to explain in detail how they are disbursing incentive bonus among their employees.

The directive came at a meeting held in the division on the day about the issue.

The FID’s additional secretary ABM Ruhul Azad presided over the meeting where representatives from six state-owned banks and the Bangladesh Bank were present.

“This is a primary meeting about the issue. The banks have been asked to explain how they are giving away incentive bonus to their employees,” an FID high-up said, wishing not to be named.

Before the move, the Bangladesh Bank on June 20 advised the Financial Institution Division to take action against the loss-making public banks distributing incentive bonus every year.

The central bank formulated the incentive bonus rules for the state-run banks back in 2014 at the request of the Ministry of Finance.

As per the BB data based on December 31 of 2019, out of six state-run banks, only BDBL has made profit while Sonali, Janata, Agrani, Rupali and BASIC bank incurred losses.

The state-run Sonali, Janata, Agrani, Rupali disbursed Tk 437.39 crore such bonus among their employees despite facing a Tk 18,500-crore loss as per their financial statements at the end of December of 2019.

At the end of June 30 this year, Sonali Bank faced a capital shortfall of Tk 3557.86 crore; Janata bank Tk 345.04 crore; Agrani Bank Tk 1960.23 crore; Rupali Bank Tk 664.94 crore; BASIC Bank Tk 1927.28 crore; and BKB Tk 11843.97 crore.

The Rajshahi Krishi Unnayan Bank had a shortfall of Tk 1506.40 crore, as per the BB data.