Lavish incentive bonus in four state-run banks despite incurring losses27 July 2021 Editorial Desk
Despite incurring huge losses amid the Covid-19 pandemic, four state-owned commercial banks (SCBs) have disbursed a vast amount of incentive bonus among their employees for "good performance" before the Eid-ul-Azha festival. In June, the central bank had sent a letter to the Financial Institutions Division (FID) of the Finance Ministry for preventing the banks -- Sonali, Janata, Agrani and Rupali - from paying incentives despite their poor financial health. The FID of the ministry did not take any initiative to deter the banks from disbursing the bonus.
Media reports say, Sonali Bank provided four incentive bonuses to its employees, while Agrani Bank paid three and a quarter. Rupali Bank and Janata Bank gave three bonuses each. Every incentive bonus equals a month's basic salary. This was not the first time that the financially weak state banks did pay incentive bonuses, ignoring the central bank's recommendation. According to the BB, the four SCBs faced either a shortage of required provisioning or capital shortfall. For instance, Sonali Bank faced a capital shortfall of Tk 3,064 crore last year, while the provisioning shortfall at Agrani Bank stood at Tk 1,319 crore and at Rupali Bank it was Tk 822 crore. Janata Bank witnessed a net loss amounting to Tk 5,054 crore last year when its capital shortfall surged to Tk 5,475 crore.
Economists and top bankers said the incentive bonus rules for the SCBs dictate that the employees should get such bonus based on the net profit made by the respective institutions, and that they should not be eligible for it if losses are incurred. The rules also suggest fixing the incentive bonus based on a bank's net profit, only after making necessary provision against the classified loans and other sourced assets, and also when the liquidity position would remain at a satisfactory level.
The state-run commercial banks' waste of people's money in the name of incentive bonuses when they are incurring losses over the years cannot be condoned. The government banks are doing this at a time when thousands of poor and needy people are passing their days in utmost sufferings for loss of income and livelihoods because of the pandemic.