State-owned Janata Bank is struggling with a massive burden of non-performing loans, a severe capital shortfall and a huge provisioning deficit. At a time when the bank is facing growing financial pressure and struggling to protect depositors’ funds, its officials allegedly received substantial financial benefits from the bank in the form of bonuses and lunch subsidies.

According to a government audit report, Janata Bank paid its officials Tk 1.5347 billion in incentive and festival bonuses in 2023, despite the bank’s actual financial condition. In addition, the bank spent another Tk 1.1302 billion on lunch subsidies in violation of government directives.

In total, Tk 2.665 billion was spent on bonuses and lunch benefits for bank officials.

The Commercial Audit Directorate under the Office of the Comptroller and Auditor General recently conducted an audit of Janata Bank’s activities for 2023 and 2024. The audit report said the financial benefits were provided in violation of directives issued by Bangladesh Bank and the Ministry of Finance, as well as the Government’s “Service (Banks, Insurance and Financial Institutions) (Pay and Allowances) Order, 2015.”

Tk 1.53 Billion Bonus Based on Reported Profit
According to the audit report, Janata Bank paid its officials incentive and festival bonuses equivalent to 3.75 times their basic salaries in 2023. The bank spent Tk 1.5347 billion from its funds for the payments.

However, the bank’s actual financial condition at the time was precarious. According to audited accounts, Janata Bank was required to maintain provisions amounting to Tk 211.8188 billion in 2023 but could maintain only Tk 58.3504 billion. This left a provisioning shortfall of Tk 153.4684 billion.

Despite the huge deficit, the bank showed a reported profit of Tk 553.1 million on paper and paid bonuses to its officials.

The Ministry of Finance’s guidelines stipulate that officials of state-owned banks can receive incentive bonuses only if the bank obtains a minimum score of 50 in its final performance assessment. Janata Bank’s score, however, was only 35.

The audit report therefore concluded that the officials were not eligible for the bonuses.

The audit team identified the bonus payments as unlawful and unrecovered financial losses and recommended that the money be recovered from the concerned officials and deposited back into the bank’s treasury.

Tk 1.13 Billion Spent on Lunch Subsidies
Janata Bank also provided lunch subsidies to officials despite the absence of a legal provision for such payments.

At its 406th board meeting held on December 30, 2015, the bank’s board of directors decided to provide a daily lunch subsidy of Tk 200 to officials in grades 2 through 10. The benefit was subsequently provided to officials for years on the basis of that decision.

However, Article 20 of the Government’s “Service (Banks, Insurance and Financial Institutions) (Pay and Allowances) Order, 2015” states that employees in grades 11 through 20 are entitled to a monthly tiffin allowance of Tk 200. There is no provision for daily lunch subsidies for officials in grades 2 through 10.

The audit report said the board of directors or any administrative authority of a bank cannot approve additional financial benefits in violation of government laws and orders.

It therefore classified the Tk 1.1302 billion spent on lunch subsidies as unlawful expenditure and financial wastage.

Financial Crisis Deepens
The rapid increase in non-performing loans is one of the major reasons behind Janata Bank’s financial difficulties.

The bank’s non-performing loans stood at Tk 721.07 billion in June 2025. The amount increased to Tk 725.39 billion by December and exceeded Tk 757.28 billion in June 2026. Nearly 80 percent of the bank’s non-performing loans are reportedly concentrated among its top 20 defaulters.

The bank’s provisioning crisis has further aggravated the situation. According to its audited accounts for 2025, Janata Bank had a provisioning shortfall of Tk 559.32 billion. During the same period, the bank incurred a net loss of Tk 39.31 billion.

By June 2026, its capital shortfall had reached Tk 501.60 billion, according to the report.

Bank Management’s Response
Janata Bank Managing Director Md. Mojibur Rahman said the bonuses and lunch subsidies were provided with the approval of the board of directors. He said the system had been in place for a long time and similar benefits were also provided by other state-owned banks.

Bangladesh Bank spokesperson Arif Hossain Khan said Janata Bank would be in the best position to explain how bonuses were paid despite the provisioning shortfall and why lunch subsidies were provided. He said the bank itself would have to provide a satisfactory explanation to the audit authorities regarding the objections.

Nazma Mubarek, secretary of the Financial Institutions Division of the Ministry of Finance, said there was no scope for paying bonuses when a bank had a provisioning shortfall. She said such incentives were no longer being provided in the same manner and that steps were being taken to prevent similar irregularities in the future.

Dr. Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), said providing bonuses and allowances to officials of a state-owned bank in violation of government rules amounted to abuse of power and misuse of public money.

He said the argument that “other banks also provide such benefits” was not acceptable. According to him, those responsible for the irregularities—including members of the board, senior management and officials who received the money—should be held accountable and face exemplary punishment.