Kotak Mahindra Bank declares 10% pay cut for staff with over Rs 25 lakh annual salary

Mumbai: Private sector lender Kotak Mahindra Bank has decided on a 10 percent pay cut for the employees earning above Rs 25 lakh per annum, in a business sustainability move amid the COVID-19 pandemic, according to a communication. The move comes weeks after the top management voluntarily surrendered 15 percent of their payments for 2020-21.

. @KotakBankLtd says it has decided on a 10% reduction in CTC for all colleagues with a salary of more than Rs 25 Lakh per annum, with effect from May 2020 for FY21. Employees earning less than Rs 25 lakh p.a. will not be impacted pic.twitter.com/1sf40W6QVk

— CNBC-TV18 (@CNBCTV18Live) May 7, 2020

The COVID-19 crisis is expected to have a heavy impact on the economy and many corporates have been cutting salaries. Some have also retrenched staff, with the unorganised sector being hit the most. The unemployment rate in India touched 27 percent in the week to 3 May, according to think-tank CMIE. Click here to follow LIVE news and updates on stock markets “What seemed like a 2-3 months phenomenon in the beginning, has turned out to be a pandemic with serious implications on both lives and livelihood. More importantly, it is increasingly clear that the pandemic is not going away anytime soon,” Kotak’s group chief Human Resources officer Sukhjit S Pasricha said in an internal note. The move to recalibrate salaries is driven by the objective of business sustainability, Pasricha said. “We have decided on a 10 percent reduction in CTC (cost to company) for all colleagues with a salary of more than Rs 25 lakh per annum, with effect from May 2020 for FY21,” the note said. Quoting the bank’s Managing Director Uday Kotak, the note said, “we are into unchartered waters and only time will tell how we as a firm, as an economy, as a country, as a world, as humanity, emerge from this momentous event.” The group and Kotak himself had earlier announced donations to the PM-CARES Fund and also the Maharashtra chief minister’s relief fund.