Target set for state-owned bank CEOs

The finance ministry has set targets for the highly paid chief executive officers of three recently corporatised state-owned banks (SoBs) for the evaluation of their performances quaterly.
The ministry sources said these CEOs, being paid on commercial basis, draw over Tk one lakh each monthly.
A CEO said, "I have taken the challenge. I am hopeful of meeting the target. In September quarter I have already progressed remarkably in this regard."
The performance targets for the CEOs of Sonali, Janata and Agrani Bank have been set in June and December up to 2010.
In the case of Sonali Bank, the default loan has to be brought down to Tk 7,704 crore or 39 percent of the outstanding loan by December 2008. The figure was Tk 8,546 crore or 44 percent in June 2008. By September, Sonali's actual non-performing loan came down to Tk 8,085 crore.
This bank's classified loan recovery target is Tk 500 crore and profit target Tk 450 crore by December.
In the case of Janata Bank, the default loan has to be brought down to Tk 1,763 crore or 14 percent of the outstanding loan by December 2008. The figure was Tk 1,965 crore or 16 percent in June 2008. By September, Janata's actual non-performing loan came down to Tk 1,636 crore.
Janata Bank's classified loan recovery target is Tk 200 crore and profit target Tk 650 crore by December.
In the case of Agrani Bank, the default loan has to be brought down to Tk2, 573 crore or 25 percent of the outstanding loan by December 2008. The figure was Tk 2,992 crore or 29.79 percent in June 2008. By September, Agrani's actual non-performing loan came down to Tk 2,981 crore.
Agrani Bank's classified loan recovery target is Tk 300 crore and profit target Tk 600 crore by December.
The banks have also been given target for increasing net interest income, operating and staff efficiencies, capital fund and computerisation of branches covering etc. Staff efficiency includes improving of staffing level, income per staff and staff cost as percentage of total operating cost.
A specific target has been set for computerisation of the branches to modernise the banks.
Under the banking sector reform programme, the three banks were corporatised in early 2008. Three CEOs have been chosen on competitive basis. Besides, various reform measures have already been started in the banks.
Asked about any possible removal of the CEOs on lapses in achieving target, the finance ministry source said.