Rules eased for banks to give incentive bonuses to staff

• Last year, stricter conditions were imposed on incentive bonuses for bank officials
• This time, up to one month’s basic salary was allowed as a bonus even if standard criteria are not met
• But only if the bank records an operating profit

Bangladesh Bank has eased rules for banks to award incentive bonuses to staff.

The central bank said boards of directors may approve up to one month’s basic salary as a bonus in recognition of “special achievements” by a bank during the year, even if the usual eligibility criteria are not met.

However, this discretionary payment will only be permitted if the institution records an operating profit. In addition, the bank must ensure that regulatory capital is maintained at least at the previous year’s level (excluding adjustments for deferred provisions approved by Bangladesh Bank) and that no fresh applications are made for deferred provisioning facilities.

Officials said the move aims to boost morale among officers and employees while preserving competitiveness in the banking sector. The regulator stressed that compliance with the outlined conditions is essential to ensure financial discipline and safeguard stability.