Written by The Banking Post
The government has introduced new guidelines linking incentive bonuses for employees of state-owned banks and financial institutions to their annual performance.
According to a notification issued Thursday by the Financial Institutions Division (FID), staff will now receive bonuses based on indicators such as profit, deposit growth, loan recovery, and investment performance. Previously, many banks distributed bonuses arbitrarily, with some granting up to five in a single year.
State-owned commercial banks can approve incentive payments at the board level, while specialised and non-scheduled banks, as well as financial institutions, must seek FID approval. Criteria vary by institution: for example, the House Building Finance Corporation must meet three conditions, while the Investment Corporation of Bangladesh must satisfy five, including capital market growth and recovery of classified loans.
The bonus amount will equal one month’s basic pay from the last month of the financial year, distributed on a pro-rata basis depending on length of service. Employees must complete at least six months in a given year to qualify. Retired or resigned staff will also receive payments proportionally.
If institutions fail to meet the performance criteria, bonuses will be withheld. However, the FID may grant an ex gratia payment equivalent to one month’s basic salary regardless of performance shortfalls.
