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The state-run Sonali Bank paid five incentive bonuses, instead of three, to its employees for 2023 violating the government rules, the Bangladesh Bank (BB) has found.
The government has thus asked the bank to return the money equivalent to two incentive bonuses by realising that from the employees, officials have said.
The commercial bank spent some Tk 2.90 billion on paying the five bonuses for 2023.
The irregularity was detected recently when a central bank team visited the bank and scrutinised its 2024 draft financial statement.
In the statement, the bank also kept aside Tk 4.0 billion to pay incentive bonuses for 2024, the team found.
The central bank in a recent letter to the bank said according to the Incentive Bonus Guidelines for Sonali Bank PLC-2024, the bank's final score for 2023 stands at 95.
Thus, it is entitled to pay three incentive bonuses at best, according to the guidelines. However, the management paid five bonuses violating the guidelines, the letter said.
The bank's board of directors at a meeting in August 2024 gave post-work approval for the five bonus payments citing conditions that the management would take approval from the finance ministry. If not approved, the employees will return the money equivalent to two bonuses.
Subsequently, the management in November 2024 sent a letter to the finance ministry seeking approval for five bonuses. However, the ministry is yet to give the approval, the central bank letter mentioned.
Earlier, the central accounts division of Sonali Bank in May 2024 sought approval from the finance ministry for incentive bonuses equivalent to the basic pay for four-and-a-half months for 2023.
However, the ministry declined the proposal and asked to pay three incentive bonuses in line with the guidelines.
The central bank team also found that the bank management kept aside Tk 4.0 billion to pay incentive bonuses based on the performance of the employees during the calendar year 2024.
The inspection team raised questions about the allocation of such a huge amount of money for bonuses when the bank's capital to risk-weighted assets ratio (CRAR) stood at 8.75 per cent for 2024 against the lowest limit of 12.50 per cent.
"Keeping additional allocations for incentive bonuses amid capital shortfall will go against the efforts to strengthen the bank's financial health," mentioned the central bank letter.
Contacted Saturday, Sonali Bank Managing Director Md Shawkat Ali Khan told The Financial Express the bank's employees performed "very well," which helped the institution make huge profits in the past.
Thus the incentive bonuses were recently given to motivate the employees. Besides, Tk 4.0 billion has been kept for 2024 to incentivise their outstanding performance, he said.
He also said he had received the central bank's letter and the finance ministry also subsequently directed him to settle the issue as per the guidelines.
"We will now hold a meeting with the employees and make a decision," said Khan.
The manager further said the bank earned operating profits of Tk 56.40 billion in 2024, which may stand at around Tk 8.0 billion as net profits eventually. "This is a huge amount for a bank."
Contacted Saturday, Financial Institutions Division Secretary Nazma Mobarek told The Financial Express the Sonali Bank management had contacted them about the pending approval for the 2023 incentive bonuses just before the Eid holiday.
"We clearly asked them to settle the issue in line with the incentive bonus guideline," she said, adding there is no scope for providing additional bonuses violating the rules.
syful-islam@outlook.com