Kathmandu: As the fiscal year concludes, banks across Nepal have begun depositing bonuses into employee accounts—and Kumari Bank employees, who had not received bonuses for the past two years, have finally received a closing bonus this year.
A bank employee confirmed that an amount equal to one month’s basic salary was credited to employee accounts at the end of Asar (mid-July) as a “closing bonus.”
Ranked among the top five banks in the country based on total assets, Kumari Bank had been unable to generate sufficient profit in the past two fiscal years due to a surge in non-performing loans (NPLs) and a significant increase in loan loss provisions.
In FY 2022/23, the bank recorded a profit of Rs 517.9 million. However, in FY 2023/24, profit dropped drastically to just Rs 4.6 million, as per external audit reports.
Because of these low earnings, the bank had not distributed bonuses to its employees for the past two years. However, improvements in loan recovery in the recent fiscal year allowed the bank to allocate a bonus equivalent to one month’s salary as an advance.
Under the Bonus Act 1973, banks are required to allocate 10 percent of their net profit as employee bonuses. Section 5(1) of the Act clearly states, “Every profit-making institution must set aside 10 percent of its annual net profit to be distributed as bonuses to employees.” Banks have been consistently following this rule, distributing bonuses based on their earnings.
While some banks offer bonuses equal to six to seven months of basic salary, others distribute bonuses only after completing external audits. Many banks issue partial bonuses during the fiscal year’s closing, followed by the remainder after the audit and during the annual general meeting (AGM).
Kumari Bank has now followed the same trend, issuing a partial “closing bonus” with more to potentially follow after auditing. As of now, the bank employs around 3,300 people.
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