SBI pushes for share options for staff

Scheme to raise Rs 800-1,200 crore through discounted sale

State Bank of India (SBI), thecountry’s largest lender, plans to introduce a share purchase programme worth Rs 800-1,200 crore for all its employees. The bank aims to launch this scheme during the next financial year.

“We have written to the government seeking approval for the employees’ share purchase scheme. We intend to do it in 2014-15. But it is subject to the government and shareholders’ approval,” Arundhati Bhattacharya, SBI chairperson, told reporters on the sidelines of an event here on Friday.

Bhattacharya added that all employees of the bank — including its officers and clerks — will be offered SBI shares at a discounted rate. “All the employees will be eligible. The shares will be offered at a discount. Otherwise it does not make sense and they can buy it from the market. The size of the issue will depend on the price at which the shares will be offered. We expect it to be in the range of Rs 800-1,200 crore,”she said.

SBI shares closed at '1648.75 on the BSE, up 4.60 per cent from Thursday's close. The government currently owns 58.6 per cent stake in the bank. The state-run lender closed the last financial year with 228,296 employees, data available with the Reserve Bank of India (RBI) showed.

Bad loans
Bhattacharya said the bank was making efforts to reduce its bad loans and is aiming to improve its credit quality in the coming months.

“You can take it for granted that we are making a conscious effort to reduce our non-performing assets,”she said adding that the lender was also exploring options to sell bad loans to asset reconstruction companies.

The bank’s gross non-performing asset ratio had deteriorated by 43 basis points to 5.73 per cent at the end of December, 2013. The pressure from stressed loans had prompted the bank to increase its loan loss provisions by 24 per cent during the third quarter.