The Hindu Business Line : City Union Bank gets nod for ESOPs

Coimbatore, April 3 Employees of City Union Bank are all set to get stock options soon. The Kumbakonam headquartered private bank has already got an in-principle nod from the Reserve Bank of India for introduction of the Employee Stock Option Scheme.

The bank now awaits the consent from its shareholders. The Extraordinary General Meeting (EGM) of the bank is slated for April 26.

The Executive Director of CUB, Mr N. Kamakodi told Business Line over telephone, “We have taken the cue from the new generation banks. ESOP has become the order of the day and our introduction is an extension of the logic.”

CUB would seek shareholders’ approval for issuing 5-crore equity stock option to eligible employees and directors. He said, “We are not, however, looking to issue the entire stock in one lot. It will be performance-based. ” The remuneration committee would meet after getting the consent from the shareholders on the course of action.

Asked if the scheme would help in keeping the attrition levels low, he said, “ESOPs generally boost employees’ morale and motivate them. But there is no statistical record to prove that it will reduce attrition, although logic says it will.”

How quickly will the bank introduce the ESOP? “It will not happen immediately or within the next couple of months. It may take a while,” Mr Kamakodi said.

The bank, in the meantime, plans to conduct orientation programmes for its employees to create awareness about this move.

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