It is unacceptable that a losing state-owned commercial bank in its worst performing year has rewarded its employees for “good performance”. It may sound surprising, but it happened in Janata Bank, though its financial performance in 2019 was the worst in last five years. The employees of the bank were rewarded with the highest number of three incentive bonuses worth Tk 119 crore.
According to a media report in a national daily on Thursday, at the end of 2019, Janata Bank’s net loss stood at Tk 12,296 crore. However, it showed an artificial profit amounting to Tk 24.6 crore, taking a waiver from its obligation to maintain provisions against its risk-weighted assets.
Mentionable that Janata Bank has already tainted its name in the over Tk 8,300 crore loan scams involving two big groups — AnonTex and Crescent group — which surfaced in 2018. Yet the bank spent on incentive bonuses despite its failure to keep the required provisions against its bad assets.
It is to be noted that a central bank’s investigation also found that every tier in loan processing — from top to bottom of the bank — was involved in two big loan swindles. But the bank’s management allegedly kept quiet about its huge losses by taking a provision forbearance only to give incentive bonuses to its employees.
However, Managing Director of the bank Md Abdus Salam Azad, whose tenure will end in December this year, defended the incentive bonus payment, saying the bank performed well in terms of recovering loans and deposit collection. He also claimed that there is no relation between incentive bonuses and profits of a bank. Even if the bank does not make a profit, it still can give an incentive bonus by taking ex gratia, which means “out of kindness”.
In this context, we want to say that BASIC Bank has stopped giving incentive bonuses since 2012 as it incurred a huge loss after a loan scam of Tk 4,500 crore. Similarly, Bangladesh Krishi Bank which also has been running in losses did not give any incentive bonus in the last two years.
In any case, no matter how much money the government injected into this beleaguered bank for a sustainable recovery, it was indefensible for the bank management to award three bonuses to its employees when it has been running losses for the last five years. It is the pleasure nesting culture that gives them courage.
