India's largest lender, State Bank of India (SBI), on Friday said it plans to offer up to 3% of annual profit to employees as part of a talent retention and motivation initiative.
Reports quoting chairperson Arundhati Bhattacharya said the PSU bank has sought permission from the finance ministry. Finance Minister Arun Jaitley is likely to take a decision soon on the proposal.
She said that the government allows the bank to share 1% of its profit with the employees. However, SBI now wants to raise that limit to 3%.
"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," PTI quoted Bhattacharya as saying, as she emphasised on it as "necessary especially for people in senior management and mid-level management" given the huge gap in the incentives between the private and public sectors.
The chairperson said that by sharing profit with the employees the bank will be able to retain meritorious people, who are often wooed by private sector. She apprehended that such moves would only rise with the arrival of new banks.
SBI's net profit increased nearly 20% to Rs 13,101.57 crore in financial year 2014-15 as compared to Rs 10,891.17 crore in the previous year. It has around 2.3 lakh employees.