Bankers can’t be fired for missing it: BB

Efficiently completing all tasks does not guarantee appreciation from managements as attaining deposit targets is solely prioritised by private banks, which is the case for at least one mid-level official.

Stationed in a Rajshahi city branch, him and his seven fellow officials there have been tasked with mobilising Tk 100 crore this year by the head office. His personal responsibility – drawing Tk 5 crore.

"It is quite impossible for me to mobilise such a large amount of deposits this year given the business volume of the city," said the official in anguish while requesting anonymity.

"My bank was established in 2013, meaning it has not drawn that much of attention as of yet among clients," said the official.

Nowadays he has little time to take a break, working even while having lunch. And things are getting worse day by day as annual target volumes keep skyrocketing.

"If I am unable to fulfill the target, the bank will stop giving both increments and incentives.Life does not exist here, it may be elsewhere," he said with a deep sigh.

There have been cases when the lender either sacked employees or asked them to resign for failing to achieve targets, he said.

Against this backdrop, Bangladesh Bank has finally taken note of the woes of the private bankers, stepping in yesterday to stop the "malpractice".

As per the latest central bank notice, no bank will be allowed to sack or ask any employee to resign or postpone promotions over failures to attain deposit mobilisation targets.

The central bank issued the notice in a clarification to a previous circular released on January 20.

"Misleading information is being circulated from different corners giving a partial explanation to the (previous) central bank notice. This has hampered implementation of the circular, which is not expected at all," said the latest BB notice.

The central bank in its previous circular did not mention anything about laying off nonperformers or promoting them, said the notice.

The BB did not impose any embargo on banks from taking action against employees who breached banking norms.

A mid-level official of another private lender said his bank set the target in a way such that the majority of employees would not be able to achieve it.

Along with the deposits, banks set other targets such as over distribution of credit cards and recovery of default loans.

"I am now working at a branch located at Madhabdi in Narsingdi. And I have to distribute at least 12 credit cards among qualified customers this year," said the official.

"How is it possible to provide such a huge number of cards at the upazila level?" he said.

"We of course try to fulfil the business targets. But the unattainable targets are not acceptable as this takes a toll on us," said the official.

Every bank has to set targets to keep its operation vibrant, but setting unrealistic goals should not be acceptable, said a central bank official.

The central bank is trying to stop the practice such that employees in the banking sector can get relief from unrealistic targets set by private banks.

But managing directors of private banks have strongly opposed the decision, as they reckon that it would have a negative impact on banking operations.

The entire globe is going round based on competition and business cannot be sustained unless there is a target, said a managing director of a lender, wishing not be named.

"If banks do not mobilise deposits as expected, how will they lend to borrowers?" he asked.

The BB on the June 20 notice also stipulated that the entry-level salary of assistant officer, trainee assistant officer, trainee assistant cash officer or equivalent officials would be a minimum Tk 28,000 during the probation period.

Their total salary, including basic pay, will have to be at least Tk 39,000 a month after the end of the probation period, it added.

The central bank also mentioned that the opening salary of support staff, messengers, cleaners, security guards, or equivalent positions, should be at least Tk 24,000.

BAB Opposes

The Bangladesh Association of Banks (BAB) opposed the stances of the central bank. The organisation will meet the central bank governor today requesting overturning the decisions.

On top of that, the central bank has recently squeezed the single borrower exposure limit, something the BAB would request reinstating to its previous level.

The organisation of private bank directors has taken the decision yesterday at a virtual meeting.