Welcome to Business Outlook
Related Articles
For the first time in history, Bangladesh Bank yesterday fixed minimum salaries for entry level bank officials in a bid to encourage talented youths to choose banking as a career and play a role in the nation’s economic advancement.
The central bank said the entry level salary of assistant officers, trainee assistant officers, trainee assistant cash officers, or equivalent, would be a minimum of Tk 28,000 during the probation period while their total salary, including basic, would be at least Tk 39,000 per month once regularised.
After implementing the minimum salary structure, banks will have to proportionally increase the salaries of officials who have been working in those positions, Bangladesh Bank said in a circular.
It also asked banks in the country to comply with the order from March 1 this year – a move that was critically received by the chief executives of some private banks.
On condition of anonymity, the managing directors of two private banks said the central bank’s decision would not do any good for the banking sector.
“This move will have a negative impact on the banks’ financial health as there is no scope to provide such a large amount of money to the messengers of lenders,” one of the managing directors said.
“In addition, the central bank should not set the salary structure of private banks,” he added.
According to the second managing director, the decision may even force many banks to terminate the positions of messengers and junior officials in order to cut costs.
The directive comes as the central bank found that some banks are fixing salaries of entry level positions as per their wish instead of based on merit. Besides, their pay is very low compared to the salaries of bankers working in top positions.
“Such an unusual disparity is not acceptable at all,” Bangladesh Bank said. “It was also observed in some banks that salaries vary among officials working in the same capacity.”
The central bank went on to say that motivation and commitment to work does not grow among bankers because of salary discrepancies for their failure to attain targets, or on the grounds of inefficiency.
“As a result, various complications such as inefficiency, unfair competition and moral degradation are emerging, which is a barrier to proper human resource development and governance and detrimental to bank companies,” the central bank said.
Citing these issues, Bangladesh Bank suggested banks rationalising the difference between the salaries of top officials below the position of chief executive officer with that of the lowest grades.
Similarly, the salaries of all officials should be fixed proportionately, it added.
Once the new structure is in effect, the salary of any official must not be below the amount the person already gets under any circumstance, the central bank said.
It also barred banks from giving deposit collection targets to bankers as a precondition for annual increments or making the job permanent.
“No one can be sacked or deprived from promotions on the excuse of their failure to achieve targets,” it said.
The central bank also mentioned that the opening salary of support staff, messengers, cleaners, security guards, or equivalent positions, should be Tk 24,000.
The directive will not be applicable for state banks though as the salaries of the relevant officials are fixed based on a pay scale, Bangladesh Bank said.
As of June 2021, the banking sector employed a total of 186,784 people.
(TDS)
