Banks tie workers' pay to deposit target

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By Enitar Ugwu

TOUGH days lurk ahead for banks' employees, who fail to meet the deposit targets set for them by their employers, as they may henceforth forfeit their pay.

The approach by virtually all the nation's banks is seen as an attempt to whittle down the salaries of their employees as the global financial crunch begins to take toll on their operations.

The Guardian learnt that while some banks structured their workers' pay on the scale of 20 per cent variable payment, others opt for 50 per cent.

This means that out of the 100 per cent monthly pay package of an employee, 20 per cent is dependent on successful delivery of the workers' monthly deposit target.

If a worker fails to deliver the target, he or she forfeits 20 per cent of the salary for that month.

The same goes for those operating the 50 per cent variable payment system, that is

50 per cent of the staffer's salary is guaranteed, while the other 50 per cent is dependent on target delivery.

Officials of the affected banks told The Guardian that the policy was not unconnected with the uniform year-end for the banks at the end of this year.

They argued that this was the time for banks to amass deposits to be financially stronger, pointing out those seen to be weak would lose their depositors.

The officials argued that the measure would not only boost banks' bottom lines but would ensure that workers were put on their toes as competition for deposits among banks was getting stiffer.

Already, most banks' marketers are complaining of steep targets, which they said are increasingly becoming hard to meet in the face of the global financial meltdown.

These targets range from N700 million to N800 million monthly, depending on the workers' rank.

Besides, they said the pressure being mounted on them by management to perform or be sacked was worsening the situation.

Another issue that bother banks is their exposure to margin loans, which they must sort out to make their profit margins real.

Incidentally, ARM Investment Managers, in their latest report on the banking industry at the weekend, warned that the race for the twin issues and also the quest by banks to adopt the International Financial Reporting Standard (IFRS) may prove counter-productive as these may put the banks, particularly the perceived weaker ones, under undue pressures.                    -Guardiannews

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