Bangladesh Association of Banks on Sunday recommended up to 15 per cent cut in salaries and allowances of employees of the private commercial banks for one year.

The association, however, recommended the salary reduction only for the staff drawing more than Tk 40,000 per month.

The recommendation was made as many banks were incurring losses in last couple of months after the outbreak of coronavirus, when the central bank instructed all the scheduled banks to provide relaxations to the borrowers.

Besides, a near stagnant local and international trade and investments was another reason for the plunge in earnings of the banks.

The BAB letter, issued by its secretary general Abdur Rahman Sarker, was sent to the private commercial banks on the day, a number of directors confirmed.

The letter mentioned 13 reasons for the plunge in bank earnings.

The reasons included fall in investments and in interest income against the investments, dropping of loan recovery close to zero, growing volume of overdue loans, suspension of interest income for the months of April and May, plunge in exports and imports and drastic fall in remittance inflow.

To survive the situation BAB also suggested other measures than salary cut.

A number of senior bankers, however, said that even if such a tough measure was taken, the salary cut should be higher for the highly paid officers and the rate of cut should be lower for the less-paid staffs.

Besides, the BAB survival proposals include halt to new branch opening and fixed asset purchasing, cutting advertisement funds and corporate social responsibility expenditure, reducing local and international training and tour of employees and delaying promotion of employees.