BRPD Circular Letter No. 15: Policy regarding payment of provident fund and gratuity for contractual officials and employees of a bank company.

Ref No.: BRPD-Circular-15
Bangladesh Bank
Head Office
Motijheel, Dhaka-1000
Banking Regulation and Policy Department
Bangladesh.
BRPD Circular Letter No. -15
Date: -----------------------
15 May 2023
Managing Director / Chief Executive Officer
All Scheduled Banks operating in Bangladesh.
Dear Sir,
Regarding the policy to be followed for the payment of provident fund and gratuity for contractual officials/employees of the bank.
Reference is made to BRPD Circular No. 18 dated 24 December 2018 on the above subject.
02. Through the said circular, in order to bring order, good governance, and dynamism in bank management, the age limit for contractual officials/employees, including the Chief Executive and other subordinate officials/employees of the bank, was set at 65 (sixty-five) years to eliminate age disparity among them. Additionally, instructions were given to formulate their own retirement age policy for regular officials/employees of private banks, keeping in line with the retirement age limit for officials/employees of state-owned commercial and specialized banks, when determining the retirement age for regular officials/employees of private banks.
03. Now, it has been reported that in some banks, upon completion of the tenure of regular employment of officials/employees working in the bank, interest on the accumulated provident fund during their regular employment period has been continued to be calculated for some officials/employees who were subsequently appointed on a contractual basis. Furthermore, the contractual period is being added to the regular employment period to calculate the total tenure of employment, and gratuity is being paid based on the last drawn salary or the average of the last drawn salary; which is not admissible in any way according to regulations.
04. In this context, in order to ensure greater order and good governance in the banking sector, instructions are hereby given to follow the following policy for determining the entitlement of provident fund and gratuity when regular officials/employees working in the bank are reappointed on a contractual basis out of urgent necessity of the bank after completing their regular employment period:
05. These instructions are issued under the power conferred by Section 45 of the Bank Company Act, 1991.
06. These instructions shall come into force immediately.

Yours faithfully,
(Md. Harun-ur-Rashid)
Director (BRPD)
Phone-9530095
(a) Following the existing policy at the time of final retirement after the completion of the regular employment period of officials/employees appointed in the bank, the full amount admissible as provident fund and gratuity shall be paid; (b) There is no need to create any provident fund for contractual officials/employees, and they shall not be entitled to such benefits; (c) No official/employee appointed on a contractual basis shall be entitled to any new gratuity benefit.