The Bangladesh Bank has issued a show cause letter to City Bank asking it to explain concerns among its employees regarding job termination amid the coronavirus crisis with a view to reducing operating costs.
The central bank on July 30 issued a letter to the bank following a number of complaints received from City Bank employees.
In the complaints received by the BB, City Bank officials informed the central bank that they feared of being termination as part of the bank’s move to reduce operating costs.
Instigated by the complaints, the BB in its letter said that a number of employees, unwilling to disclose their identities, had informed it that they were in fear of termination.
BB governor Fazle Kabir had recently instructed the banks to encourage their employees for the sake of implementing the government announced stimulus packages, a BB high official said on Tuesday.
At this stage, the complete opposite of what the BB governor had instructed is taking place if fear of termination is found to be evident among the City Bank employees, the official said.
Under the circumstances, City Bank was asked to submit the details if any of its employees was terminated or if any employee had resigned from his or her post since April 1 this year.
The BB letter to City Bank came at a time when a number of banks, including City Bank, have reduced the salary of their employees in the name of lowering operating costs after the coronavirus outbreak.
Besides the pay cut, some banks and non-bank financial institutions were trimming manpower to offset the cost burden.
Among the entities, at least 80 employees of AB Bank were either terminated or forced to resign during the ongoing coronavirus pandemic.
After the coronavirus outbreak, City Bank managing director and chief executive officer Mashrur Arefin in a video statement posted on June 15 said that the bank’s management and board had decided to reduce by 10 per cent the salary of its employees who were receiving more than Tk 30,000 for the sake of its depositors.
Besides, increment and performance bonus of its employees would remain suspended until 2021, he said, adding that the bank would begin to provide performance bonus and promotions to its employees from 2022 when the situation would become normal.
He also predicted that the banking industry would follow the pay cut strategy while some of them would also axe employee jobs in the coming days as a means of cutting costs to serve.
Panic among the bankers deepened when the Bangladesh Association of Banks, among others, came up with a suggestion to reduce the salary of bankers by up to 15 per cent.
When contacted, City Bank’s public relations department officials declined to make any statement in this regard.
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