Centre considering ESOPs for bank employees: Finance Minister Arun Jaitley – Economic Times

8 months ago Comments Off on Centre considering ESOPs for bank employees: Finance Minister Arun Jaitley – Economic Times

NEW DELHI: State-run bank chiefs have strongly backed the idea of consolidation while the government is actively considering employee stock options (ESOPS) for bank employees, finance minister Arun Jaitley said on Saturday.

Heads of state-run banks, who gathered for a two-day retreat with senior government and Reserve Bank of India officials, have urged the government to set up an expert group to draw up the road map for consolidation, the finance minister said.

The government had kicked off the retreat with bankers, called ‘Gyan Sangam’ last year to enable it to work as a platform to share ideas and help banks emerge from the stress of bad loans. It is also a forum to brainstorm on broader policy issues confronting the banking sector.

“What is the strategy for this consolidation? The bankers themselves have suggested an expert group to immediately go into this issue. We will consider that suggestion,” Jaitely told reporters at the end of the two-day session.

He also said the issue of ESOPS has been a long standing demand and it was receiving “active consideration”.

Jaitley did not give details but it is certainly will be cheered by bank employees.

Government in the past has taken up the issue of consolidation to create large and strong banks. Jaitley said the expert group which would be set up will consider all aspects of consolidation.

“What is the best course for consolidation, where do you start from? Which are the banks to be considered? I think the entire issue of consolidation so that we can have strong banks. There is no weak link in the chain,” said Jaitley.

“And that’s probably what the group would decide. Is it subsidiaries with holding company? Is it somewhat a weaker bank with a stronger bank, is it banks which are strong in regions coming together or allowing those regional banks to operate as niche banks?” said the minister.

Bankers also suggested strengthening of the Debt Recovery Tribunal and the SARFAESI Act. The FM said the department of financial services, which oversees the state run banks, was working to overhaul the Acts and empower banks in the recovery process. He said the government was awaiting the report of the joint committee on the Bankruptcy and Insolvency law.

Minister of state for finance Jayant Sinha said the asset quality review has been completed by the Reserve Bank of India. He said there’s been a system wise assessment of stressed accounts.

“Really what Gyan Sangam-II focussed on is the resolution process not necessarily the recognition process and far as resolution is concerned a number of ideas were brought forward in terms of how the resolution process could move more expeditiously,” said Sinha

Centre considering ESOPs for bank employees: Finance Minister Arun Jaitley – Economic Times}