ESOPs for public sector bank employees? Decision could happen after Lok Sabha elections

Public sector bank employees may get skin in the game with the Centre reportedly reviving talks for offering stock options to staff, a long-pending demand of the lenders. 

The proposal, according to an Economic Times report, may be taken up after the Lok Sabha polls. Consultancy major Deloitte has been roped in for suggestions, the report added.

BT could not independently verify the report. 

The Economic Survey 2020 had proposed ESOP for public sector employees. The Survey had underlined the absence of risk-taking and innovation among PSB employees due to fixed salaries. 

The development comes amid the agreement between negotiating committee of the Indian Banks’ Association (IBA) and Bank Officers’ Associations and workmen employees unions for a 17 per cent increase in salary revision, translating into a collective outgo of ₹12,589 crore for 12 public sector banks (PSBs) which are party to the 12th industry-wide bipartite wage settlement.

Banks have already started making provisions since the beginning of the first quarter of FY24 for the salary revision. 

The outgo for PSBs on account of wage revision for officers’ and workmen is ₹8,424 crore and ₹4,165 crore, respectively.

According to the 9th joint note, which will remain in force for five years from November 1, 2022, in terms of the December 7, 2023, IBA and the associations have reached an understanding for declaration of all Saturdays as public holidays under the Negotiable Instruments Act for the banking industry. 

IBA has accordingly recommended to the government for the same. According to the note, the due changes in the working hours will be effective after necessary approvals and clearances from the Centre and Reserve Bank of India.