Decision to cut salaries of officials and employees of 5 banks

Bangladesh Bank has decided to cut salaries of officials and employees of five banks that are in the process of merging. These banks are First Security Islami Bank, Union Bank, Social Islami Bank, Global Islami Bank and Exim Bank.

These decisions were taken after a meeting with the administrators of the five banks at the Bangladesh Bank headquarters on Wednesday (November 26). Bangladesh Bank Governor Ahsan H. Mansur presided over the meeting. Other senior officials were also present in the meeting.

Meanwhile, a recent statement by Bangladesh Bank showed that these five banks are paying salaries to employees from depositors' money. For example, First Security Islami Bank showed a net operating loss of Tk 4,308 crore till December last year, while the expenditure on salaries and allowances was Tk 6.52 crore.

This means that employees were being paid through depositors' money. The bank posted a net loss of Tk 5,450.15 crore last year, while total operating expenses were Tk 1,516.1 crore.

On August 26, the central bank wrote to the chairman of First Security Islami Bank that an inspection by Bangladesh Bank had uncovered "serious administrative failures."

Earlier this month, Bangladesh Bank sent a letter to the government and initial approval to form a new state-owned bank called Sammilit Islami Bank PLC by merging five weak Sharia-compliant banks.

Since the interim government took office, Bangladesh Bank has provided about Tk 35,300 crore in liquidity support to these five banks. But the banks have not yet returned this money to the central bank.