Regulatory Alerts2023-06-21
Added
DFIM Circular Letter No. 12: Policy for Payment of Provident Fund and Gratuity for Contractual Employees of Financial Institutions
The document establishes policies for the payment of provident fund and gratuity to contractual employees of financial institutions. It mandates that upon the completion of regular service, final provident fund and gratuity amounts must be paid in full according to existing policies. Conversely, it explicitly states that contractual employees appointed to any position within financial institutions are not eligible for any provident fund or gratuity benefits. These instructions are issued under Section 18(c) of the Financial Institutions Act, 1993, and take effect immediately.
Department of Financial Institutions and Markets Bangladesh Bank Head Office Dhaka. Ref No.: DFIM/DOFM/Reg/12 DFIM Circular Letter No.-12 Managing Director/Chief Executive Officer All Financial Institutions operating in Bangladesh.
Dear Sir,
Regarding the policy to be followed for payment of provident fund and gratuity for contractual employees of financial institutions.
Reference is invited to DFIM Circular No.-01, dated: 28 March 2019, on the above-mentioned subject.
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Through the said circular, instructions were issued that no person who has crossed 65 (sixty-five) years of age can be appointed or continued in a contractual position in a financial institution. Additionally, in determining the retirement age for regular employees/officers, each financial institution is instructed to formulate its own policy regarding the retirement age of its employees/officers, ensuring consistency with the rules and regulations applicable to the retirement age of regular employees/officers of state-owned commercial banks and financial institutions.
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Now, in order to ensure discipline and good governance in financial institutions, instructions are issued to follow the following policies for determining eligibility for provident fund and gratuity in the appointment of contractual employees:
(a) Upon completion of regular service of employees/officers working in financial institutions, the final provident fund and gratuity amounts payable must be paid in full according to the existing policies at the time of final retirement; and
(b) Contractual employees/officers appointed to any position in financial institutions will not be eligible for any provident fund/gratuity facility.
These instructions are issued under the powers conferred by Section 18(c) of the Financial Institutions Act, 1993, and shall take effect immediately.
Yours faithfully,
(Md. Amir Uddin) Director (DFIM) Phone: 9530178.
07 Ashar 1430 Date: 21 June 2023