Finance Minister AMA Muhith yesterday said separate pay scales for the staff of Bangladesh Bank and state-owned commercial banks would be finalised by June.

The assurance came after long dithering over the issue.
“I am guilty for it (the delay),” Muhith told reporters at his secretariat office after a meeting with officials of the state banks.

The central bank has made a proposal on the separate pay scale, while the state banks have prepared another. The committee formed by the government has prepared yet another proposal, the minister said. A structure will be finalised based on the three proposals, he said.

During the previous BNP rule, an initiative was taken to give a separate pay scale for the staff of the central bank and state banks under a banking sector reform programme.

Dr Fakhruddin Ahmed, the then governor of the central bank, pursued the government for long, without any success. Even when he became the chief adviser of caretaker government, his attempt failed due to strong opposition from government officials.

After the present government came to power, Muhith pledged that a separate pay scale would be in place, following persuasion by Bangladesh Bank Governor Atiur Rahman.

A committee led by the cabinet secretary scrutinised the two proposals made by the central bank and the state banks and it has been with the finance ministry for all this time.

At yesterday's meeting with the chairmen and the managing directors of the state banks, Muhith had a long discussion on the latest performance and problems of the banks. The governor of BB was also present.

The state banks presented the issue of huge outstanding loans of government entities, including Bangladesh Petroleum Corporation (BPC).

According to finance ministry statistics, the government institutions outstanding loans to the state banks stood at Tk 30,939 crore up to January 2012. Of the amount, BPC alone owes more than Tk 17,000 crore.

Muhith said a number of decisions were taken in the meeting about repayment of the loans. The government institutions will have to provide the banks with clear repayment schedules when opening letters of credit.

The minister said the institutions would continue to deposit foreign currency to the banks' accounts on schedule.

According to an existing policy, the government institutions will deposit 75 percent of their funds to state commercial banks but many institutions have not been going by the rule, he said.
“The policy will be strictly reinforced.”

Muhith said the government institutions have also been increasing the rate of interest on deposits tactfully. It will be stopped, he said.

The Daily Star/Bangladesh/ 8th March 2012