BSI's former Asia chief Hanspeter Brunner, who is under scrutiny by Singapore prosecutors over the bank's ties with a Malaysian state firm, has sued the Swiss private bank after his bonus was frozen.
Mr Brunner alleges that BSI's Singapore unit breached bonus agreements and a separation pact with him, papers filed on July 4 in the Singapore High Court show.
There is no legal basis for BSI to suspend the payment for deferred bonuses due last month, he said.
Mr Brunner, 64, is among six BSI bankers referred to prosecutors in Singapore after its regulator said in May that the bank would lose its licence in "the worst case of control lapses and gross misconduct" in Singapore's financial sector.
Among BSI's major clients was 1Malaysia Development Bhd (1MDB), a subject of money laundering and embezzlement probes in at least half a dozen countries. A former BSI wealth planner in Singapore became the first banker to be charged in the probes. 1MDB has denied any wrongdoing. Mr Brunner has not been charged.
BSI and Mr Brunner's lawyers declined to comment.
BSI and Swiss national Brunner "mutually agreed" in September that he would retire from the bank, according to court papers.
In March, a separation agreement laying out his entitled payments, including deferred bonuses for 2012-2014, was inked and the bank announced his retirement.
Mr Brunner sued after BSI wrote to him on June 24, saying it would freeze a payment of S$722,800.
He said in court papers that the bank is also "intending to renege on all of its other payment obligations" totalling US$1 million (S$1.35 million), due to be paid through June 2018. Mr Brunner joined BSI in 2009 from RBS Coutts with about 70 colleagues.
Coutts and Mr Brunner traded lawsuits after his departure, the bank suing in Singapore for the return of an advance bonus while Mr Brunner claimed in a Zurich complaint that he was wrongfully fired. The firm later settled its lawsuit, according to Singapore court records.