“Acche din” is here, and in a big way, for public sector bank employees.
The government has said lenders can dole out higher cash incentives to their staff if performances exceed expectations.
The aim is to motivate them to perform better, and keep “some sort” of parity with private sector peers.
The issue was discussed during the review meeting held between finance minister Arun Jaitley and public sector bank chiefs earlier in the month, sources said.
“We are aware of these issue and we will see what steps can be taken including providing cash incentives to employees,” a government bank chairman who did not wish to be identified told HT.
Besides, banks may even decide to give out-of-turn promotions, fancy postings, and assign special projects to retain talent at a time when competition is fierce in the banking space. State-owned banks are already facing a severe talent crunch.
Bank chiefs typically provide a statement of intent to the government, outlining their goals for the year at the start of a fiscal year. Their performance is measured based on their achievements vis-a-vis the statement of intent.
State Bank of India chairperson Arundhati Bhattacharya recently said that compared to private sector counterparts, state-owned bank employees are poorly paid, and also underlined the need to provide better remuneration to retain talent.
Several bank chairmen have already said that most employees have “out performed” to ensure the success of Prime Minister Narendra Modi’s flagship scheme Pradhan Mantri Jan Dhan Yojana.
The finance ministry is also likely to consider a proposal to revisit the incentive structure of bank chiefs and executive directors. At present, incentives can vary anywhere between Rs 4 lakh per annum and Rs 6 lakh, depending on performances of banks.
In a few cases, where the performance of a particular bank has been exceptionally good, the incentive pay out has touched Rs 8 lakh too, sources said.