Lack of clear structure to hinder banks' fundraising plans via ESOPs

Uncertainty over staff participation, lack of clear structure key obstacles

The plans of public sector banks to tap their employee base to raise capital through employee stock purchase schemes (ESPS) are likely to be a non-starter owing to uncertainty over staff participation and lack of clarity on structure of the offer. Moreover, analysts are of opinion that the amount of capital planned to be raised by banks is way less than their overall requirement, making this route ineffective.

In March last year, the government allowed PSBs to offer stock options to their employees. The move was aimed at retaining experienced hands as well as attracting top talent from the private