6% of private bankers lost jobs during pandemic

A staggering 7,167 bankers lost jobs between April 2020 and September last year as private commercial banks desperately tried to cut operational costs amid a business slowdown brought on by the coronavirus pandemic.

The employees, who were either fired or forced to resign, represented nearly 6 per cent of the total workforce of 122,912 in the banking sector of Bangladesh as of June last year.

Fifty-one private banks informed the Bangladesh Bank that they had sacked 1,292 employees while another 5,875 resigned.

They made the disclosure about the job cuts after the BB instructed them to inform it the number of employees who left banks during the period.

The central bank found that private lenders had not followed due diligence properly while cutting jobs.

"Banks mentioned that the employees had resigned willingly. But, the reality is different as banks had forced them to resign in most of the cases," according to a central bank probe report seen by The Daily Star.

The Daily Star talked to five retrenched employees who claim that their employers had not given any specific reason for their removal.

One banker faced termination in June 2020, a time when the pandemic was at its peak in Bangladesh and millions of people were rendered jobless due to the strict lockdown measures.

He said, "I achieved tremendous success during my career. As a result, I was made an executive vice-president when I was 43. But, the bank did not consider my achievements while terminating me."

"I don't know why I lost my job. The bank did not mention any reason."

Another former banker said his employer told him that it would terminate him if he did not leave.

"There is no scope to enjoy service benefits or manage another job in a bank if I faced termination. So, I resigned."

The banker informed the central bank about his predicament in order to get back his job.

The BB took into account his application and instructed the bank to reinstate him.

"But, the bank is yet to comply with the BB order," he said.

The central bank has received at least 328 applications from the retrenched employees. It carried out probes into a number of banks last year.

In many cases, banks created an unpleasant situation for the employees so that they left on their own, the BB probe reports said.

Some banks even did not issue any explanation or show-cause letter before firing the employees. Banks had threatened that the employees who would not resign would face lay-off.

Many banks set difficult targets such as mobilising a higher amount of deposits for the employees during the pandemic when the economy faced a slowdown. The employers sacked the staff members on the excuse of failing to achieve the targets, the probe reports said.

Many banks claimed that the officials had left as they had better opportunities in other banks or other sectors, said a BB official.

"But, the claim is mostly baseless as the entire job market faced stagnation during the peak of the pandemic and the recruitment process came to a halt."

Analysts say banks could have avoided the large job cuts as their operating profit bounced back strongly last year.

The operating profit of 22 banks analysed by The Daily Star showed that all of the lenders except one posted higher profit in 2021 compared to a year ago.

WHAT BANKS SAY

Among 51 lenders, Brac Bank was on the top in terms of the number of officials who resigned. Some 1,023 employees of the bank quit and 56 others were laid off. 

Selim RF Hussain, managing director of the bank, says that the lender terminates employees working in the sales team from time to time.

"Those who are unable to fulfil their specific targets face termination. Many employees also leave the bank willingly after failing to hit the targets," he said.

The number of officials resigned and terminated is lower than the pre-pandemic era, Hussain said, adding that Brac Bank did not cut any job to give a boost to its operating profit.

"Besides, we extended the deadline by four to five months during the pandemic so that employees can attain the targets. We also hired many people during the pandemic."

Some 718 employees from City Bank resigned and 160 were laid off. 

Mashrur Arefin, managing director of the bank, said that the lender had started reinstating the employees who had faced job losses.

"We have already reinstated 27 employees as per the central bank instruction. And more employees will be reinstated," he said.

The operating profit of City Bank jumped 57 per cent year-on-year to Tk 1,101 crore last year.

Some 371 employees left their jobs at Dutch-Bangla Bank Ltd (DBBL), which also terminated another 130. 

"We have not forced any employee to resign," said DBBL Managing Director Abul Kashem Md Shirin.

Some probationary officers might have found government jobs without informing the bank, which is why they faced termination as per rules, he said.

DBBL, whose operating profit stood at Tk 1,228 crore last year in contrast to Tk 1,050 crore a year ago, re-hired seven officials.

Fifty-four officials of Pubali Bank resigned and 377 saw termination.

Mohammad Ali, additional managing director of the bank, said that the bank had not laid off any employees.

The officials who were terminated were absent from their jobs in breach of rules, Ali said.

The bank earned an operating profit of Tk 1,140 crore in 2021, a rise of 22 per cent year-on-year.

At NRB Commercial Bank, 256 officials resigned and nine staff members were sacked. 

Golam Awlia, managing director of the bank, said that the lender had not sacked any employee or asked anyone to resign. Its operating profit stood at Tk 450 crore, up 40 per cent from a year ago.

BB ACTION

The central bank instructed banks on December 15 last year to reinstate all employees who applied to return to their previous jobs.

Banks have been asked to preserve the required documents relating to the reinstatement of the officials. The central bank will examine the documents to see whether its instruction has been followed.

On January 20, the BB said banks can't sack any employees over missing any deposit targets. 

EXPERTS' REACTION

Fahmida Khatun, executive director of the Centre for Policy Dialogue, said a large number of job cuts was not expected at all during the pandemic. Almost all private banks managed a healthy operating profit last year.

The central bank had extended tremendous support to banks throughout the pandemic to help them keep their business afloat, she said.

"Banks should reinstate those who lost jobs, or else the image of banks will be affected."

Salehuddin Ahmed, a former governor of the BB, said that the massive resignation and layoff was a reflection of a lack of governance in the banking industry.

The easy hiring and firing policy is not a good sign, he said, adding the central bank should compel banks to follow a proper human resources management policy.