Govt mulls over ESOPs for bank staff

Govt mulls over ESOPs for bank staff

Govt mulls over ESOPs for bank staff
The government will soon set up an expert group to look into consolidation of public sector banks as the country needs stronger banks rather than a large number of lenders, Finance Minister Arun Jaitley said here on Saturday.

The minister also said the government is considering Employee Stock Ownership Plan (ESOP) for public sector bank officials besides strengthening the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi Act) and Debt Recovery Tribunals (DRTs) to deal with the problem of stressed assets that are estimated at around Rs 8 lakh crore.

Addressing a press conference at the conclusion of the second edition of Gyan Sangam, Jaitley said that consolidation in the banking sector was discussed at the meeting and bankers themselves have suggested that an expert group should be set up soon to look into the issue. “We will consider that suggestion,” the minister said. There could be niche banks and banks which could survive independently and sustain themselves well, he said, observing that the Gyan Sangam strongly supported the idea of consolidation in the banking sector.

The other idea which was suggested at the meeting was to reward the public sector bank employees with ESOP, he said.“Government is considering (ESOP proposal). It is in a very advanced stage...It has been a long standing demand, and is (under) active consideration,” Jaitley said.

With regard to the rising non-performing assets or bad loans, Jaitley said that besides strengthening the institutional mechanism, the government has been taking sector specific decisions to deal with the problems in segments like power, highways, sugar and steel.

Giving details of the deliberations during the conclave, Jaitley said there are suggestions to amend Sarfaesi Act and also expedite the DRT process by some more amendments to law. “The Department of Financial Services is working in that direction and work is in fairly advanced stage,” he said, adding that DRT will become the country’s first online court.

“We are anxiously waiting for report of the Joint Committee on Bankruptcy and Insolvency Law. That will create a structural and institutional mechanism which will help the bank as lenders,” said Jaitley. “As far as recovery is concerned...Neither loan waiver has been given, nor will be given,” the minister added.

DH Newsletter Privacy Policy Get top news in your inbox daily
GET IT
Comments (+)