Commercial banks listed with capital market are paying their top executives exorbitant salary and allowances breaching the central bank rules.
An analysis of the Chief Executive Officers (CEOs) and Managing Directors (MDs) salaries, disclosed by the 30 listed banks recently, shows that they paid Tk17.66 crore as remuneration to their top executives in the first half of the current calendar year.
They had paid Tk15.56 crore to their top executives during the same period of the previous year.
This disclosure was made in their half-yearly financial (January-June) statements.
“Average CEO salary at listed banking companies soared during the first half of the current calendar year, pushing up their expenditure to the heads of salary and remuneration,” a company secretary of a private bank told The New Nation on Wednesday, asking not to be named.
He said, pay across the banks under the purpose look high, given the generally low return on their equity, value of their assets, market exposure and rankings.
“Even, banks are paying their top executives exorbitantly violating rules,” he added.
According to the disclosure, CEOs of the banks were paid an average monthly remuneration of Tk 5.88 lakh, which includes salary, commissions, allowances, value of all perquisites and other perks.
It shows, Eastern Bank Limited’s (EBL) CEO and MD Mr Ali Reza Iftekhar got Tk 95.46 lakh as salaries during the said period whereas he received Tk 88.78 lakh during the same period a year ago, making him the highest paid top executive in the banking sector.
The bank paid him an average Tk 15.91 lakh as salary per month. EBL is ranked 26th among the banks in the country, but it is paying highest salary to its CEO violating the central bank guidelines.
City Bank Limited’s Sohail RK Hussain got Tk 86.56 lakh, making him the second higest paid top executive in the banking sector.
He was followed by Bank Asia CEO who got Tk 78.20 lakh, Exim Bank CEO Tk 75.64 lakh, IFIC CEO Tk 75.60 lakh and Shahjalal Islami Bank CEO Tk 72.40 lakh, according to the disclosure.
CEOs and MDs of the country’s leading banks having huge market exposure, capital, deposit and business are eligible to draw big salaries as per the central bank rules. But in many cases, CEOs of smaller banks are drawing bigger salaries than the top executives of big banks ignoring the rules of Bangladesh Bank, Dr Khondoker Ibrahim Khaled, former central bank Deputy Governor told The New Nation.
He said top bankers at the private commercial banks have the tendency to draw big salaries although their performance is not satisfactory and even banks are in bad shape.
“The central bank should take appropriate steps to curb exorbitant executive pay by banks,” he said.
“We have already issued guidelines regarding the salary and remuneration of banks’ chief executives. A department is also looking into the matter. If banks found breaching the rules, we would take action accordingly,” a BB official told The New Nation yesterday.
