Pvt sector banks to pay big-time bonus

Written by Mahalakshmi Hariharan | Mumbai | Updated: Jan 27 2010, 03:10am hrs
The New Year has brought some cheer for private sector bank employees as they are waiting for their bonuses and increments after a dull year when they were striving to keep their jobs intact, let alone expecting any bonuses.

Private sector banks like ICICI Bank, HDFC Bank, Axis Bank, IndusInd Bank and Kotak Mahindra Bank are also looking at rewarding their employees with decent bonuses and increments.

Most banks are looking at increments in the range of 12-15% across the board, which may be higher for top performing employees, who can expect a good 20-25% bonus this year.

These banks are also on a massive staff expansion spree and their hiring plans will be unveiled soon.

Zubin Mody, executive vice-president & head of HR at Indusind Bank, said that bonuses and increments are very much on the cards. We are looking at healthy increments and bonuses this year. About four years ago, we were giving out bonuses at about 5% of the CTC. It is expected to move even higher.

Kodak Mahindra Banks executive director Dipak Guta said that with the market now changing, bank is looking at giving out bonuses and increments for their employees this year.

HDFC Bank, too, is not lagging behind in the race. A spokesperson of the bank said that its a regular practice for the bank to reward that employees which will happen this year as well.

S Bhattacharya, president & head of human resource (HR) at Axis Bank, too, noted that bonus and increments will be given to employees, which would be completely performance-based.

Earlier, ICICI Bank had admitted the bank is looking at providing increments for its employees this year, unlike last year.

The bonus payments at ICICI Bank are generally around 10-15% of an employees salary, which could be higher in case of very good performers. Stock options are also provided to them.

ICICI Bank executive director K Ramkumar had told FE, We have a board approved bonus policy, where we have to meet targets to get bonus. Last year, bonuses were not given because we didnt meet our targets. However, this year, there is no reason to worry.

While bonuses and increments are in, banks are also on a massive hiring spree. Indusind Banks Mody said the bank may look at hiring close to 1,500 employees during the next financial year.

The banks total staff strength currently stands at 5,100. Between April-December 2009 we had made 1,000 fresh recruitment, no replacements, said Mody.

After witnessing a downturn last year, Kotak Mahindra Bank too plans to start hiring again.

In the previous and the current quarter, we have added about 1,000 employees. We are making fresh recruitment in some pockets as our branches are growing, Gupta said. However, the bank has also witnessed some kind of attrition in some of the departments like front line sales. The attrition levels at the middle and senior level is comparatively lower at about 10%, he said.

With mid-sized private sector banks, their larger peers, too, are looking at hiring more employees for the bank.

For instance, a spokesperson with HDFC Bank said they have several tie ups with premier management institutions. Well continue to hire in line with our business plan, he said.

Axis Bank, with a total employee strength of 21,800, will need ipeople for its retail business and other operations. We will hire from top B-schools. On an average, we hire 40-45 individuals from such institutes, said Bhattacharya.

Meanwhile, ICICI Bank is looking at recruiting about 5,000 candidates in next year. If the economic activity picks up it may hire even more. In 2009-10, we have recruited about 4,000-4,500 people. And these are all replacements, no fresh recruits, said Ramkumar.

ICICI Bank MD & CEO Chanda, Kochhar in a recent interview told FE, We are hiring at junior levels currently. We would approach the IIMs over a period of time. We increased salaries last year and will do so this year too.