BB permits banks to offer incentive bonuses to employees

Bangladesh Bank today (28 April) issued a new directive allowing scheduled banks to provide incentive bonuses of up to one month's basic salary to officers and employees, even if they do not fully meet certain pre-set criteria.

The Banking Regulations and Policy Department (BRPD) of the central bank issued a circular and sent it to the managing directors and chief executive officers of all banks.

The move aims to boost employee morale and promote a competitive working environment in the banking sector.

The directive relaxes specific conditions outlined in BRPD Circular No 12, issued on 9 December, 2025.

Under the new instruction, if a bank does not qualify for an incentive bonus under the strict conditions of the 2025 circular, its board of directors may still approve a bonus of up to one month's basic salary.

However, to be eligible for this relaxation, banks must have earned an operating profit during the relevant year, maintained regulatory capital at a level no lower than the previous year (excluding any reduction resulting from a deferred provision previously approved by Bangladesh Bank), and not applied for any new provision deferral facilities from the central bank during the period.

The circular said all other provisions and conditions of BRPD Circular No 12/2025 would remain unchanged.

Earlier this month, Association of Bankers, Bangladesh (ABB) appealed to the central bank governor to reconsider the decision that prevented banks with capital and provisioning shortfalls from paying incentive bonuses to officers and staff.

Following that request, the central bank revised its stance.

A managing director who attended the meeting at the time told The Business Standard that such restrictions were making it difficult for banks to retain talented employees, as efficient workers would be less likely to stay without incentive bonuses.

For that reason, ABB had urged the central bank to move away from the earlier policy.