The central bank has advised the Financial Institutions Division (FID) of the Ministry of Finance to take actions against the loss-incurring state-owned commercial banks (SoCBs) that have been disbursing incentive bonus to their employees every year.
The central bank in a recent letter to the FID pointed out the irregularities and requested the latter to take measures against the banks which were providing such bonus despite incurring losses.
Some leading SoCBs have been paying up to three incentive bonuses while others one in violation of the existing rules.
The central bank had prepared the ‘incentive bonus rules’ for the SoCBs back in December 2014 at the request of the MoF.
However, the unified rules are not being followed by the SoCBs even more than six years after their formulation.
According to the rules, the employees should get incentive bonus based on the net profit to be made by the respective institutions, and that they should not get the same if banks fail to make profit.
The rules also suggested fixing the incentive bonus based on a bank’s net profit, only after making necessary provision against the classified loans and other soured assets, and when the liquidity position would remain at a satisfactory level.
According to statistics as on 31 December 2019, out of six SoCBs, five incurred a cumulative loss of Tk 192.63 billion in that year. Only the…