State Bank of India (SBI) today said it plans to offer up to 3 per cent of annual profit to employees as part a talent retention and motivation initiative.
The bank has sought permission from the Finance Ministry in this regard, SBI Chairperson Arundhati Bhattacharya told PTI.
"...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 one 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. "It is necessary especially for people in senior management and mid-level management, the amount that they get in the private sector is much higher than they get in the public sector," she said.
As a result what happens is that people who come up to the higher levels because of their merit and hard work, are easily picked up 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," she said.
For the fiscal ended March 2015, SBI's net profit increased 20 per cent to Rs 13,101.57 crore as compared to Rs 10,891.17 crore for the year ended March 2014.
Total income on standalone basis increased to Rs 1,74,972.96 crore from Rs 1,54,903.72 crore for the year ended March 2014.
SBI Group's consolidated net profit rose 20 per cent to Rs 16,994.30 crore during 2014-15 fiscal as compared to Rs 14,173.77 crore in the previous fiscal.
Besides, the bank 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. The bank has about 2.3 lakh employees.