Rastriya Banijya Bank staff may not get bonus

The staff of Rastriya Banijya Bank (RBB) may not get a bonus this year from the profit the bank made in fiscal 2008-09 as the Commission for Investigation of Abuse of Authority (CIAA) has barred public enterprises (PEs) with a cumulative loss from doing so. RBB had sent a proposal to the Finance Ministry recently asking for its approval to distribute bonuses worth Rs 182.4 million to its staff. The bank had earned a profit of a little over Rs 2 billon in 2008-09. It has been paying a bonus to its staff since the last five years from its annual profits. The bank's net worth, however, is still negative by Rs 10 billion.

"No PE with a cumulative loss can distribute bonuses as per our direction," said CIAA spokesperson Ishwori Poudyal. "PEs whose capital has eroded cannot claim a bonus even though they may have been making a profit operationally for a few years." On July 31, the CIAA had directed the chief secretary and other concerned government agencies not to allow distribution of bonuses in PEs with a cumulative loss. Earlier, the anti-graft body had ruled likewise when Nepal Oil Corporation (NOC) had decided to distribute Rs 198.8 million as bonus to its staff for fiscal 2008-09 from its profit of Rs. 3.31 billion. Despite the profit, NOC was still in the red by Rs. 7.92 billion, according to the Finance Ministry. According to the annual performance review of PEs prepared by the Finance Ministry, 18 out of 36 PEs incurred losses in fiscal 2008-09.

However, RBB chief executive officer Janardan Acharya said that RBB and NOC should not be seen in the same light. "Unlike NOC, we have been providing dividends and revenue to the government and we have not taken any financial support from the government to make this impressive profit," added Acharya. He argued that the new "energetic" staff should not be punished for the mistakes made by past employees. Acharya also warned that the bank's staff may lose enthusiasm to work resulting in a decline in profits next year. The Bonus Act allows private firms to pay a bonus amounting to 10 percent of the net profit for the year while the limit for public enterprises is 8 percent. Terming the Bonus Act impractical, the government has already moved to amend it while banning distribution of bonuses until the cumulative loss is recovered.

"The Bonus Act allows RBB to pay a bonus; but in practice and in principle, it cannot do so as NOC has been prevented from paying extra money to its staff," said Tanka Mani Sharma, joint secretary of the Finance Ministry. He, however, added that he could not confirm whether RBB would be allowed to distribute bonuses until the government takes a definite decision in this regard.

Source:
ekantipur