Union Bank to raise Rs 6 bn by issuing shares to staff under ESPS

The board of Union Bank of India has cleared a proposal to raise up to Rs 6 billion by issuing shares to its staff under the employee share purchase scheme.

The proposal was approved in a board meeting Monday, the bank said in a regulatory filing.

The bank proposes to raise capital through issuance of shares worth up to Rs 6 billion in one or more tranches to its employees under Employee Share Purchase Scheme (ESPS), it said.

In September, shareholders of Punjab National Bank (PNB) approved allotting 100 million shares to the employees of the bank under ESPS while Syndicate Bank approved to raise up to Rs 25 billion under this scheme.

Bank of India will also offer 10 crore shares under ESPS and Canara Bank will issue up to 60 million shares to its staff to raise up to Rs 10 billion.

The government in March 2017 allowed public sector banks to offer stock options to their employees, aimed at retaining experienced hands besides providing a means of capital raise.

Allahabad Bank has already raised nearly Rs 2.36 billion in its maiden ESPS scheme.

United Bank has also issued 50 million fresh equity shares to employees under the scheme on August 31, 2018.

Stock of Union Bank was trading 0.51 per cent up at Rs 78.85 on BSE.