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Share sale to staff on SBI menu

Arundhati Bhattacharya in Calcutta on Friday. Picture by Bishwarup Dutta

Calcutta, March 7: The State Bank of India is planning to sell shares to all its employees, raising Rs 800-1,200 crore. The scheme is likely to come into effect in the next financial year.

“We have written to the government to allow us to do a share purchase scheme. We would like our employees to also be owners,” SBI chairman and managing director Arundhati Bhattacharya said here today on her first visit to the city after taking over as the head of the country’s largest bank.

Bhattacharya said the shares would be offered to all employees, irrespective of their posts, at a discount to the market price.

“There will be a discount, otherwise it does not make sense as 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 somewhere between Rs 800 crore and Rs-1,200 crore,” she said.

According to data with the Reserve Bank of India, the SBI had 228,296 employees on its rolls last year. The government held a 58.6 per cent stake in the bank as on February 3, 2014. The bank recently declared an interim dividend of 150 per cent for 2013-14.

Reacting to the share sale proposal, a senior member of a bank union said, “It is a welcome move. The unions are not opposed to it.”

Besides the government, the SBI needs the approval of the RBI as well as market regulator Sebi for the scheme.

The SBI scrip gained 4.6 per cent to close at Rs 1,648.75 on the BSE today.

On bad loans, Bhattacharya said the bank was looking to improve its asset quality in the coming quarters.

“We are making a conscious effort to reduce our non-performing assets,” she said, adding the lender was scouting for opportunities to sell bad assets to asset reconstruction companies.

The bank’s gross non-performing asset ratio had deteriorated to 5.73 per cent of its assets at the end of the December quarter from 5.3 per cent in the year-ago period.

Rising NPAs have forced the bank to increase its provisions, lowering its net profit by 34.21 per cent during the December quarter.

Bhattacharya was speaking at an event at the Tata Medical Center in Rajarhat today.

The bank has donated Rs 6 crore to the hospital as part of its CSR drive for the procurement of PET-CT machine required to treat cancer.

 
 
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