A proposal put forward for exempting banking companies from the purview of the labour act aiming to help protect the sector from possible challenges is now under scrutiny, sources said.
After receiving the proposal, made recently by the Association of Bankers, Bangladesh (ABB), the finance ministry has referred the matter both to the labour and law ministries for taking next course of action.
"We have already sought opinions from the law ministry, but we are yet to get any response in this regard," a finance ministry official told the FE.
When asked, senior secretary of financial institutions division Md Eunusur Rahman said it is a matter of the labour ministry. "We also have communicated with the law ministry. But the ministry is yet to give any opinion in this connection. This is a problem."
He said, "We have already got in contact with the ministry concerned several times in this connection. We will write again to ministries concerned." "The finance ministry has written to the labour ministry that there is need to keep the banking companies out of the labour act. But no action has been taken in this connection," immediate-past chairman of ABB Anis A. Khan told the FE.
"We sent a letter to financial institutions division (FID) most recently. The finance ministry asked the secretary of the division to request the law ministry for excluding the banking companies from the existing labour act," he mentioned.
He, however, said banking companies will face problems if the government doesn't exclude the provision from the labour act.
Finance Minister AMA Muhith has recently asked the senior secretary of the FID to take required steps in this regard.
"It seemed I had requested the law ministry and labour ministry to amend the labour act. If not, take necessary steps," the minister asked the secretary.
Chapter XV of Bangladesh Labour Act-2006 contains the provisions for the establishment/creation of two funds, namely a) workers participation fund and b) workers' welfare fund, and pay 5 per cent of 'net profits' of the company accrued in the previous year to the aforesaid two funds, along with another fund created under the Bangladesh Labour Welfare Foundation Act, 2006 in the portion of 80:10:10, respectively, to the participation fund, welfare fund and workers' welfare foundation fund, according to the letter of ABB.
The Labour Act, 2006 was enacted for workers only, but the banks were included in the applicable sector for chapter XV through the Bangladesh Labour Laws (amendment) Act, 2013 which took effect from July 22, 2013.
In this connection, Bangladesh Bank (BB) on December 27, 2015 wrote a letter to the secretary of the ministry of labour and employment based on letter dated November 29, 2015 from the ABB chairman to the governor of BB, seeking advice on way forward with the issue.
The letter mentioned that Section 11 (1) (B) of the Banking Companies Act 1991 prohibits a banking company not to employ any person who receives his/her remuneration or part of remuneration in the form of commission or of a share in the profits of the company.
All scheduled banks operating in the country are governed by the Banking Companies Act and ruled are under direct control and supervision of the central bank. On the other hand, BLA was enacted only for the workers, the letter mentioned.
The inclusion of the workers profit participation fund in the amended BLA is conflicting with Section 11 (1) (B) of the BCA, the letter reads.
Unless the issue is urgently resolved, it will create problems for the overall banking sector which will face severe challenges including drop in their profitability, depletion of their capital base, decrease in share prices and possible negative impact on the capital market, a banker said.
"We seek prompt initiative and prudent guidance from the government to help the sector keep out of possible emerging situation in this context," he said.
Highly qualified and trained people are employed in the banking sector to perform a completely different nature of job, which under no terms can be termed as workers, in the mills and factories, a senior member of the ABB said.
The ABB has requested the government several times to exclude the provision from the BLA to protect the banks from probable uncertainty, the former ABB chairman added.
The government should take required steps for exempting banking companies from the purview of the labour act aiming to protect the sector from a possible challenges including drop in profitability, a senior private banker said.
Banks, historically, have provided better compensation package and congenial working environment for their employees. Moreover, the banks give additional financial facilities to its employees through incentive bonus, medical assistance, superannuation fund and welfare schemes etc. For this, applicability of chapter XV of the BLA for banking companies is not in harmony with the BCA.
Earlier on October 20 in 2015, the ABB wrote a letter to the secretary of the ministry of labour and employment on the issue and requested for measures to be taken to exempt banking from the purview of the law.
It wrote on March 09, 2016 another letter to the finance minister repeating the same request made to the law minister.
When contacted, secretary in charge of the ministry of labour and employment Afroza Khan said, "We have not got any proposal recently from the finance ministry to exclude the banking companies from the existing BLA."
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