The Union Bank of India has approved a proposal to generate Rs 600 crore through the employee share purchase scheme (ESPC), wherein the staff will be issued shares in one or more tranches.
In March 2017, the Government had permitted the public-sector banks to provide stock options to their staff. The objective of the move was not only to provide a means of generating capital but also to retain skilled and efficient resources.
Many banks in the country have taken advantage of this permit. Earlier this year, Punjab National Bank (PNB) allotted 100 million shares to its employees under ESPS, while Syndicate Bank raised almost Rs 25 billion the same way. Allahabad Bank managed to raise almost Rs 2.36 billion through the scheme. In August this year, United Bank issued 50 million fresh equity shares to its staff under ESPS.
The next to follow is Bank of India, which will be offering 10 crore shares under ESPS, whereas Canara Bank will issue up to 60 million shares, making almost Rs 10 billion.