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Starving the milking cows?

Penstar photo: Dying spirit of the bankers

I am not a banker (well, I was once and no more now), but the recent decision by the central bank to suspend the dividend and bonus payouts is outrageous to say the least. I am not a financial expert. Yet I believe the central bank’s decision to withhold the bonus payouts to the employees working in the bank does not hold water. I am sure that’s not a big number by any means.

The issue cropped up when one day RMA suddenly woke up and decided to close accounts held in banks acby non-resident Indians in the banks in the border towns. Accounts worth millions were closed following the order. And then suddenly they claimed there is liquidity issue. 

Earlier some banks had excess liquidity – meaning the banks were accepting more deposits but giving out less loans. But now with huge amounts being withdrawn, banks are no more in position to lend money. That’s where banks fail – will go out of business. Of course any payouts would hurt the lending positions of the bank.

But the point is central bank’s decision to withhold only the bankers’ bonus payout does not make sense at all. After all I am sure it is not much money especially in DHI companies – with DHI putting a two-months’ basic caps on bonus payout starting 2011. And why only bankers, while RMA has no problem if other companies pay out bonuses to their employees? Will that not contribute to liquidity issue? That’s nonsense unless someone gives us a logical reason.  

We might be in this current situation because of the decisions our people in the decision-making portfolios had made, but why should someone who has no role in it be penalized; for instance, a cashier, whose work is only to make payments and accept deposits or a branch manager who just follows the orders of their superiors? Maybe the authorities should withhold the bonuses of those people in decision-making positions for obviously it is their decisions, good or bad. 

For bankers, bonus is something that they look forward to once in a year. But now even that being suspended, I don’t think bankers see good futures ahead of them. Government (or DHI) consider banks as the revenue-making machines and nothing more. It is like – punishing the doctors for a cancer patient’s death or blaming automobile companies for the road accidents or tossing blames at the teachers for unemployment, and likewise.  


  1. U really do care for the country and her people. hats off.


    1. Well said and written I fully support your views and resentments expressed for all staff of banks in the country. I also don't find any logic in imposing such restrictions on bonus payout which is only a peanut. Rather it will have more adverse impact on the performance of banks as employees would be grossly demotivated and discouraged to perform effectively.


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