DHAKA, September 26, 2025 — The Financial Institutions Division (FID) of the Ministry of Finance has issued new, strict guidelines for the incentive bonus system for employees of state-owned commercial banks and financial institutions, ending the practice of blanket bonuses. Going forward, employees will receive a maximum of three incentive bonuses annually, and payment must be tied directly to net profit and specific performance indicators.
The FID published the comprehensive guideline on Thursday (September 25), introducing conditions to ensure greater discipline in the distribution of employee bonuses within state-owned commercial, specialized banks, and financial institutions. Officials stated that these institutions can no longer distribute incentive bonuses indiscriminately.
Key Conditions and New Profit Calculation
Under the new directive, the calculation of net profit—the basis for bonus disbursement—must first account for adjustments related to provisions for loans and advances, provisions for the increase or decrease in the value of investments, and provisions for the increase or decrease in other assets, all from the bank’s operating profit.
The FID noted that the previous bonus system lacked discipline, and the new uniform guideline was finalized after discussions with the banks to address this deficiency.
Capping the Bonuses and Past Violations
The new cap of three annual incentive bonuses directly addresses past violations. Sources indicate that several large banks previously ignored the existing policy. For instance, Sonali Bank distributed five incentive bonuses in 2023, exceeding the permissible limit. Consequently, the Financial Institutions Division issued a letter on March 27 instructing the bank’s Managing Director (MD) to recover the funds for two of those bonuses from the employees.
Performance-Based Metrics for Commercial Banks
The directive specifies that six state-owned commercial banks—Sonali, Agrani, Janata, Rupali, BASIC, and BDBL—will determine incentive bonuses based on five key performance indicators:
- Net profit as a percentage of working capital.
- Rate of increase in deposits.
- Rate of increase in loans and advances.
- Rate of recovery of defaulted loans.
- Rate of recovery of written-off loans.
Specialized banks, including Bangladesh Krishi Bank (BKB), Rajshahi Krishi Unnayan Bank (RAKUB), Karmasangsthan Bank, Palli Sanchay Bank, Probashi Kallyan Bank, and Ansar-VDP Unnayan Bank, will follow the exact same five metrics for bonus determination.
Modified Indicators for Financial Institutions
The metrics are slightly adjusted for other state-owned financial institutions:
- Investment Corporation of Bangladesh (ICB): While also using five indicators, the criteria will include Net profit as a percentage of working capital, Rate of dividend and capital profit earned against investments, Rate of recovery of defaulted loans, Rate of increase in the institution’s transaction volume in the capital market, and Rate of recovery of written-off loans.
- Bangladesh House Building Finance Corporation (BHBFC): This institution will use three indicators: Net profit as a percentage of working capital, Annual actual recovery rate from recoverable loans, and Rate of increase in the amount of loans and investments.
The new guidelines aim to instill a more performance-driven culture and greater financial accountability across the country’s state-owned banking and financial sector.
