Sonali Bank officials, employees took Tk 1.16b in excess bonuses; ordered to return the money

Sonali Bank officials and employees were given five incentive bonuses for their performance in 2023. Although the policy allowed no more than three bonuses, they received two additional ones.

An order to recover the excess payments was issued a year and a half ago, but the money has yet to be recovered. The amount is Tk 1.16 billion.

Two days after the fall of the Awami League government on 5 August 2024, a group of Sonali Bank officials and employees confined the bank’s then managing director (MD) and chief executive officer (CEO), Afzal Karim, on 7 August.

Their demand was that they be given five incentive bonuses a year. However, under directives issued by the Financial Institutions Division of the Ministry of Finance, no more than three bonuses could be paid.

As protests over the bonuses continued, the bank’s then chairman, Ziaul Hasan Siddiqui, was eventually forced to resign on 20 August. Before that, the board of directors led by him had approved five incentive bonuses, in violation of the policy, under pressure from the employees. The decision was subsequently challenged in an audit objection. Bangladesh Bank also did not approve it.

Even after two years, the matter remains unresolved. Later, former finance secretary Mohammad Muslim Chowdhury became chairman of Sonali Bank on 28 August. He too tried to resolve the issue before resigning for personal reasons, but ultimately failed. Contacted by phone, Mohammad Muslim Chowdhury declined to comment.

A bank director, however, said that the bank was now in a difficult position because a section of employees had used “mob pressure” to secure the bonuses. There would be no immediate solution without high-level political intervention, he said. At the same time, once the money has reached employees’ pockets, there is little practical prospect of recovering it.

Order to return the two excess bonuses

During the interim government’s tenure, the Financial Institutions Division wrote to Sonali Bank’s MD on 27 March 2025, ordering the recovery of the money paid as the two additional bonuses in violation of the policy. But even after a year and a half, the bank authorities have not taken steps to recover the money from the officials and employees and deposit it in the state treasury.

Officials of the Financial Institutions Division said neither the 2023 policy nor the 2025 policy allowed Sonali Bank officials and employees to receive five bonuses. Yet the bank’s officials and employees received five incentive bonuses for their performance in 2023.

After paying the bonuses, Sonali Bank applied to the Financial Institutions Division for approval and also sought forgiveness for violating the policy. However, the division did not move to approve the five bonuses by violating its own policy.

Most recently, on 11 September, the Financial Institutions Division sent another letter to Sonali Bank’s MD. It stated that the division did not agree to the payment of five incentive bonuses for the bank’s 2023 performance.

The same letter instructed the bank to recover the money paid as the two additional bonuses in violation of the policy and adjust the amount accordingly.

According to Sonali Bank sources, around 21,500 officials and employees received the bonuses. In addition to the regular three bonuses, they also received two additional incentive bonuses.

Each bonus was essentially equivalent to one month’s basic salary. A senior bank official said one bonus amounted to around Tk 600 million. On that basis, the two additional bonuses amounted to around Tk 1.16 billion.

Sonali Bank MD and CEO Shawkat Ali Khan told Prothom Alo last night, “The decision to give five bonuses was taken before I joined the bank. Since the money has already been paid, we have requested the government to accept it in some way or another. We will make the same request again.”

What Bangladesh Bank said

Bangladesh Bank prepared an inspection report on the matter based on the situation at Sonali Bank as of 31 December 2024. Subsequently, in a letter to Sonali Bank’s MD on 11 March 2025, Bangladesh Bank said the bank had paid Tk 2.9 billion in five incentive bonuses for 2023 and had set aside Tk 4 billion for bonuses for 2024.

The central bank also said that even under Sonali Bank’s own policy on incentive bonuses, no more than three bonuses could be paid. Nevertheless, at the bank’s 870th board meeting, held on 8 August 2024, a proposal to pay five bonuses was approved.

An analysis of the letter shows that the approval was conditional. It stated that if any audit objection or objection from the Financial Institutions Division arose in the future, everyone would be obliged to return the excess money and provide a personal undertaking to that effect.

Bonuses will now be determined based on 5 indicators

Sonali Bank was not the only institution where there was a widespread practice of paying incentive bonuses to officials and employees. Similar practices existed at other government-owned banks as well. For this reason, the Financial Institutions Division issued a new guideline on 25 September 2025.

The guideline applies to employees of state-owned commercial banks, scheduled specialised banks, non-scheduled specialised banks and financial institutions. It makes assessment against specific indicators mandatory when determining incentive bonuses.

Before incentive bonuses are paid to officials and employees of six state-owned commercial banks, including Sonali Bank and Agrani Bank, five indicators must be assessed. These are the rate of net profit on working capital; the rate of growth in deposits; the rate of growth in loans and advances; the rate of recovery through cash collection and adjustment from classified loans; and the rate of cash recovery from written-off loans.

The greatest weight has been given to the rate of net profit on working capital. This indicator carries more than 50 points. The number of bonuses will be determined based on the total score. Those who receive higher scores can receive a maximum of three incentive bonuses. The number of bonuses will decrease as the score falls. If the score is very low, no bonus will be given at all.

In other words, under the new guideline, the payment of bonuses is no longer a matter of the authorities’ discretion. The amount of the bonus is linked to the bank’s financial performance and its ability to recover loans.