Bangladesh Bank has instructed banks in the country to refrain from creating provident funds for employees appointed on a contractual basis and to withhold gratuity benefits as well. According to the notice issued by the central bank, such practices violate the human resource policy of the banking sector.
The policy states that employees in the banking industry may work until the age of 59, after which they must retire. However, banks may hire their retired employees on a contractual basis until the age of 65. The central bank has found that some banks are offering these facilities to retired employees working on a contractual basis, which is in breach of the policy. Therefore, the central bank has requested that gratuity and provident funds only be provided to regularised employees who retire or leave their post at the age of 59.