HDFC announced Rs 1,500 crore to staff under ex-gratia

In the wake of a remarkable performance in the fourth quarter of FY24, HDFC Bank has announced an ex-gratia payment totaling approximately Rs 1,500 crore to its workforce. The decision, revealed by Sashidhar Jagdishan, managing director & chief executive, HDFC, marks a gesture of gratitude towards employees for their unwavering dedication during the merger with HDFC.

The primary aim of this move is to tackle attrition within the bank. The bank underscored the significance of motivating its extensive ground workforce, which constitutes 90 per cent of the total manpower, particularly amid heightened attrition rates in recent years.

Following the release of its January-March earnings on Saturday, 19 April, 2024, the bank disclosed a substantial 37.1 per cent growth in net profit. This surge was primarily fueled by a one-time gain resulting from the sale of a majority stake in HDFC Credila, an education loan company. Despite this gain, the bank also allocated floating provisions amounting to Rs 10,900 crore, effectively offsetting the impact of the stake sale gain.

Sometime back, on 9 May, 2023, the bank allotted 4,561,966 equity shares of Rs 1 each to eligible employees under the Employee Stock Option Scheme.

After this allocation, the bank’s paid-up share capital increased from Rs. 5,583,443,980 to Rs. 5,588,005,946. The stock options were granted at market price, as per the SEBI (Share Based Employees Benefits and Sweat Equity) Regulations, 2021.