Share issue for HDFC employees

Anjana Samarasinghe

SHARES: The Housing Development Finance Corporation (HDFC) Bank of Sri Lanka has gone for a share issue for its employees under the Employee Share Option Plan (ESOP) to motivate their employees and increase productivity.

General Manager/ CEO of the HDFC C.A Sarathchandra said this share issue will be 5 percent of their paid up capital and a share will be issued for a lower price than the normal market price of a HDFC share.

The bank will also provide loans for employees to purchase these shares under a concessionary interest rate. For a period of time these employees cannot go to the open market to sell their shares but they could sell them to their staff members at the bank.

Sarathchandra said permanent employees who complete three years of service by 2005 are entitled to the share issue. Employees who have a long period of service at the bank will be entitled to a higher number of shares. Staff members in all positions of the bank are entitled to this.

Chairman, HDFC, S.M.M. Yaseen, said the main objective of ESOP is to motivate employees and increase their productivity which will lead to more profits. Issuing shares to employees makes employees feel that they are not working for anyone else but for themselves.

In a competitive environment organisations adopt strategies like ESOP to be competitive in the market and this will be a good message for other institutions too, he said.