IN A bid to retain talent and woo more talented staff, India's largest lender State Bank of India (SBI) is mulling a novel move. The bank plans to offer up to three-percent of annual profit to employees as part a talent retention and motivation initiative.
According to bank chairperson Arundhati Bhattacharya, SBI has sought permission from the Finance Ministry in this regard.
The move is likely to...benefit around 2.3 lakh employees.
"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 was quoted as saying in a news agency.
The finance ministry will take a call in regard.
"The amount that they (senior management and mid-level management) get in the private sector is much higher than they get in the public sector," Bhattacharya noted.
The SBI employees who come up to the higher levels by virtue of their merit and hard work, are easily absorbed by private sector, she said.
"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."
For the fiscal ending March 2015, the bank's net profit increased 20 percent to Rs 13,101.57 crore. The figure was Rs 10,891.17 crore during the last fiscal.
SBI group's consolidated net profit rose 20 percent to Rs 16,994.30 crore during 2014-15 fiscal as compared to Rs 14,173.77 crore in the previous fiscal.Besides, SBI is also considering a share-purchase scheme for all employees, irrespective of their posts. The largest public sector lender expects to raise between Rs 800-1,200 crore through this scheme.