IDFC FIRST Bank recently announced that its senior management has volunteered to take a 10% cut in compensation in the current financial year 2020-21.
Along with the leadership team, V Vaidyanathan, MD & CEO, IDFC FIRST Bank, has also voluntarily offered to take a pay cut of 30% in his compensation including Fixed compensation as well as all allowances.
Speaking on the new development, 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.”
The bank said that the management is reviewing the impact of the pandemic every day and is making all efforts to safeguard customer interest in line with its mission statement which recognizes the customer as its First Stakeholder.
On the employee front, the Bank has honored all offers that were made to new hires before the pandemic, including all lateral hires as well as 550 management trainees.
The Bank also paid 100% of the variable pay to 78.2% 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% of the eligible amount.
The Bank said that it is committed to playing its part in supporting customers as well as vulnerable communities during this difficult period.
With the recent announcement, IDFC First Bank became the second listed bank to publicly announce salary cuts for the current financial year.
Earlier this month, Kotak Mahindra Bank Ltd had decided to cut salaries by 10% for employees earning over ₹25 lakh per year. The bank had said covid-19 is wreaking havoc on the economy, which in turn will impact a financial services firm. On 29 March, Kotak Mahindra Bank committed ₹25 crore to the PM Cares Fund. Separately, Uday Kotak, managing director (MD) of the bank, committed another ₹25 crore to the fund.
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