Lok Sabha Question No. 3131 (UNSTARRED), answered on 2015-08-07
Subject: Sharing of Profit in Banks
Ministry: FINANCE
Asked by: SHRIKANT EKNATH SHINDE, PRATHAP SIMHA, A. ARUNMOZHITHEVAN, SAUGATA ROY, KALIKESH NARAYAN SINGH DEO, VINAYAK BHAURAO RAUT, ANANDRAO  ADSUL, RAMDAS CHANDRABHANJI TADAS, NAGENDRA KUMAR PRADHAN, DHARMENDRA YADAV, Shrirang Appa Barne, SHIVAJI ADHALRAO PATIL, RAHUL RAMESH SHEWALE

GOVERNMENT OF INDIA 
MINISTRY OF FINANCE 
DEPARTMENT OF FINANCIAL SERVICES

**LOK SABHA 
UNSTARRED QUESTION NO. 3131**

TO BE ANSWERED ON 7 TH AUGUST, 2015/SHRAVANA16, 1937(SAKA)

**Sharing of Profit in Banks**

**3131: DR. SHRIKANT EKNATH SHINDE, SHRI PRATHAP SIMHA, SHRI A. ARUNMOZHITHEVAN, PROF. SAUGATA ROY, SHRI KALIKESH N. SINGH DEO, SHRI VINAYAK BHAURAO RAUT, SHRI ANANDRAO ADSUL, SHRI RAMDAS C. TADAS, SHRI NAGENDRA KUMAR PRADHAN, SHRI DHARMENDRA YADAV, SHRI SHRIRANG APPA BARNE, SHRI ADHALRAO PATIL SHIVAJIRAO, SHRI RAHUL SHEWALE**

**QUESTION**

Will the Minister of FINANCE be pleased to state:

(a)  the criteria adopted by banks for sharing of the net profit with the employees as incentive;

(b)  whether the banks including State Bank of India(SBI) are proposing to offer up to 3% of annual profit to employees/staff as part of a talent retention and motivation initiative;

(c) if so, the details thereof;

(d) whether the banks have sought permission from the Government in this regard and if so, the details thereof, bank-wise and the decision taken by the Government, in this regard;

(e) whether banks are already sharing 1% of their profits for incentivisation to employees, if so, the details thereof, bank-wise; and

(f) whether SBI is considering any share purchase scheme for all employees irrespective of their posts, if so, the details thereof?

**ANSWER**

**The Minister of State in the Ministry of Finance 
(Shri Jayant Sinha)**

(a): In 2006, Government had advised all Public Sector Banks  to introduce Incentive Scheme for the grant of cash incentive to the their employees/officers based on the performance evaluation matrix prescribed with the approval of their Board of Directors.

(b) to (d): State Bank of India  has initiated a proposal to offer incentives to employees with higher performance with aggregate amount upto 5% of average net profit for last three years.  No other bank has made any such proposal.

(e): As per the existing guidelines, the total amount to be paid as incentive by any bank should not exceed 1% of the bank’s profit after tax. The bank-wise details, as available, are annexed.

(f): SBI has initiated a proposal to offer Employees Stock Option Scheme (ESOS) to its employees to provide long term incentives at senior levels as per eligibility.

**********

**Annexure**

Distribution of Performance Linked Incentive (PLI) in Public Sector Banks as on 5.8.2015

| **S.No**   | **Name of Bank**               | **2013-14**                                  |                                               | **2014-15**   |
|------------|--------------------------------|----------------------------------------------|-----------------------------------------------|---------------|
|            |                                | **% of Profit After Tax distributed as PLI** | **% of Profit After Tax distributed as  PLI** |               |
| 1          | Allahabad Bank                 | 0                                            | 0                                             | 0             |
| 2          | Andhra Bank                    | 0.03%                                        | 0                                             | 0             |
| 3          | Ban k of Baroda                | 0.79%                                        | 0                                             | 0             |
| 4          | Bank of India                  | 0.60%                                        | 0.54%                                         | 0.54%         |
| 5          | Bank of Maharashtra            | 0.098%                                       | 0                                             | 0             |
| 6          | Canara Bank                    | 0.93%                                        | 0.90%                                         | 0.90%         |
| 7          | Central Bank of India          | 0                                            | 0                                             | 0             |
| 8          | Corporation Bank               | 0.054%                                       | 0.089%                                        | 0.089%        |
| 9          | Dena Bank                      | 0                                            | 0                                             | 0             |
| 10         | Indian Bank                    | 0.01%                                        | 0.02%                                         | 0.02%         |
| 11         | Indian Overseas Bank           | 0                                            | 0                                             | 0             |
| 12         | Oriental Bank of Commerce      | 0.32%                                        | 0.37%                                         | 0.37%         |
| 13         | Punjab National Bank           | 0.88%                                        | 0.61%                                         | 0.61%         |
| 14         | Punjab and Sind Bank           | 0                                            | 0                                             | 0             |
| 15         | Syndicate Bank                 | 0.13%                                        | 0.12%                                         | 0.12%         |
| 16         | UCO Bank                       | 0.0115%                                      | 0                                             | 0             |
| 17         | Union Bank of India            | 0.51%                                        | 0.03%                                         | 0.03%         |
| 18         | United Bank of India           | 0                                            | 0.05%                                         | 0.05%         |
| 19         | Vijaya Bank                    | 0.429%                                       | 0                                             | 0             |
| 20         | State Bank of India            | 0.04%                                        | 0.09%                                         | 0.09%         |
| 21         | State Bank of Bikaner & Jaipur | 0.018%                                       | 0.01%                                         | 0.01%         |
| 22         | State Bank of Patiala          | 0.06%                                        | 0                                             | 0             |
| 23         | State Bank of Travancore       | 0.01%                                        | 0                                             | 0             |
| 24         | State Bank of Mysore           | 0                                            | 0.02%                                         | 0.02%         |
| 25         | State Bank of Hyderabad        | 0                                            | 0.006%                                        | 0.006%        |
| 26         | IDBI Bank Ltd.                 | 0.48%                                        | 0                                             | 0             |