The Financial Institutions Division of the Ministry of Finance has issued new directives regarding the disbursement of incentive bonuses to employees of state-owned commercial banks, specialized banks, and financial institutions.
According to the circular issued on Thursday, September 25, banks and financial institutions can now offer a maximum of three incentive bonuses per year, based strictly on net profit rather than operating profit. Net profit must be calculated after accounting for provisions related to loans and advances, investment value fluctuations, and asset revaluation.
The move comes amid concerns over the lack of uniformity in bonus distribution practices across various institutions. The new guidelines aim to bring consistency and discipline to the process, following discussions with bank officials.
Performance-Based Evaluation
State-owned commercial banks — including Sonali, Agrani, Janata, Rupali, BASIC, and BDBL — will now determine employee bonuses based on five key performance indicators:
- Net profit margin on working capital,
- Growth in deposit volume,
- Growth in loans and advances,
- Recovery rate of non-performing loans, and
- Recovery rate of written-off loans.
Similar criteria will apply to specialized banks such as Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Karmasangsthan Bank, Palli Sanchay Bank, Probashi Kallyan Bank, and Ansar-VDP Unnayan Bank.
For the Investment Corporation of Bangladesh (ICB), performance will be evaluated based on a slightly modified set of indicators, including returns on investments and capital market transaction growth. Meanwhile, Bangladesh House Building Finance Corporation (BHBFC) will assess performance based on profit margin, annual loan recovery, and growth in loans and investments.
Bonus Eligibility Scale
Institutions will be rated on a 100-point scale. Bonus entitlement will be determined as follows:
- Below 40 points – No bonus
- 40–50 points – 1 bonus (equal to one month’s basic salary)
- 50–60 points – 1.5 bonuses
- 60–70 points – 2 bonuses
- 70–80 points – 2.5 bonuses
- Above 80 points – 3 bonuses
The bonus amount will be based on the employee’s basic salary for the final month of the fiscal year.
Approval Process
Each state-owned bank will award bonuses with the approval of its respective board of directors. Financial institutions must seek approval from the Financial Institutions Division, based on board recommendations.
In exceptional cases, where an institution does not meet the criteria for bonuses but has notable achievements, it may still apply for a one-month bonus subject to approval from the Ministry.
The government hopes this new incentive system will enhance accountability and performance within the banking sector.
