SBI moots profit share for staff to retain talent
17 July 2015
State Bank of India (SBI) the country's largest lender, plans to offer up to 3 per cent of annual profit to employees as part a talent retention and motivation initiative.
The move is aimed at retaining officers at the middle and senior management levels and the bank has sought permission from the finance ministry in this regard, said chairperson Arundhati Bhattacharya.
The bank is also considering sale of shares to employees, irrespective of their posts. The scheme is expected to raise between Rs800-1,200 crore for the bank.
"They have a tendency of leaving and going and this will become more so with newer banks coming in and more players entering the field of banking. Therefore, for meeting competitive pressures, we need to ensure that we are able to remunerate our people better," she said.
"The amount that they (senior management and mid-level management) get in the private sector is much higher than what they get in the public sector," she said.
"If you consider the fact that incentivisation is a good way of ensuring people meet up to whatever are the challenges...they respond to them. So to that extent government allows us to share 1 per cent. We are saying that it is necessary for us to hike that amount to 3 per cent," she said.
The matter is now before the finance minister who will take decision in this regard. The bank has about 2.3 lakh employees.
For the fiscal ended March 2015, SBI's net profit increased 20 per cent to Rs13,101.57 crore compared to Rs10,891.17 crore for the year ended March 2014.
Total income on standalone basis increased to Rs1,74,972.96 crore from Rs1,54,903.72 crore for the year ended March 2014.
SBI Group's consolidated net profit rose 20 per cent to Rs16,994.30 crore during 2014-15 fiscal from Rs14,173.77 crore in the previous fiscal.