The top management of the private lender, IDFC First Bank has volunteered to take a 10 per cent remuneration cut for the financial year 2020-21 amid the coronavirus crisis.
With this, IDFC First Bank has become the second listed bank to publicly announce salary cuts after Kotak Bank and by non-banking finance company Indian Bulls Housing Finance.
The bank said it’s MD and CEO V. Vaidyanathan has offered to take a pay cut of 30 per cent in his compensation package, including fixed compensation as well as all allowances.
Vaidyanathan said, “Such pay cut forms part of the bank’s austerity measures which start at the top. Further, we feel the pain our customers—big, small, micro enterprises and people at large—are going through, and we also want to be empathetic to the situation.”
Meanwhile, the bank has paid all promised offers to their staff including the new hires as well as 550 management trainees.
“The bank also paid 100 per cent of the variable pay to 78.2 per cent of employees for the period pertaining to FY 19-20 despite the arrival of the pandemic. Variable pay for FY 19-20 was cut more progressively for employees with greater seniority, and bonus for senior management was cut by 65 per cent of the eligible amount,” said the statement.
It said that the management is reviewing the impact of the pandemic every day and is making all efforts to safeguard customer interests.
The bank’s branches and customer service teams have been operating at near-full capacity with minimal reduction in services throughout the lockdown to meet its customers’ needs, IDFC FIRST Bank added.
On Friday, the bank reported a consolidated net profit of Rs 76.36 crore for January-March 2020.
Last month, Kotak Mahindra also announced that its management had voluntarily decided to take 15 per cent less salary for the current year. The bank’s CEO Uday Kotak had decided to take a notional salary of only Re 1 for the financial year 2020-21.
“We are in the midst of a battle to protect both lives and livelihoods. The revival of the economy will depend on a healthy and robust financial sector. The bank is committed to work alongside the government, private enterprise, civil society and individuals in the tough times that lie ahead,” Kotak Bank had said.
In a similar instance, Indiabulls Housing Finance announced in April that top management has decided to take voluntary remuneration cuts of an average 35 per cent for the current year.
Company’s chairman Sameer Gehlaut had announced he will not be drawing any salary for the current year. It’s MD & CEO Gagan Banga waived off 75 per cent of his salary.