Calcutta, Sept. 6: Notwithstanding the overwhelming response to its voluntary retirement scheme a year-and-a-half ago, State Bank of India is giving final touches to a second separation scheme.
Called the ‘exit policy’, the scheme drafted by the human resource department of the country’s largest nationalised bank aims to retire ‘de-motivated’ employees aged above 50 and replace them with fresh hands.
This implies that the objective of the scheme is not to reduce manpower, but improve its quality. Public sector banks have so far used voluntary separation to reduce excess flab, and fresh recruitment has never accompanied voluntary separation schemes.
The scheme is likely to carry a much worse compensation than last time, but senior officials say it has not been finalised yet. “The scheme has recently been drafted and has yet to be approved by the board and the ministry,” said State Bank officials.
The State Bank management has, in the past, hinted at the possibility of introducing a second round of voluntary retirement scheme, but went on record denying it later. State Bank has over two lakh employees now.
The need for a second separation scheme is a tacit admission of the fact that the first VRS, despite being immensely successful, did not manage to weed out all unproductive employees from the bank’s rolls.
In fact there is a view among a section of State Bank employees that the bank lost more efficient people than inefficient ones. “The scheme this time, if introduced, will be aimed at giving an exit option to people who do not want to work any more,” explained an SBI official.
The Indian Banks Association (IBA), in a recent circular, asked the management of all banks to refrain from recruiting people who had retired from the service of a bank by taking VRS. State Bank is among the first few banks to implement the norm.
Most public banks offered handsome compensation for VRS-takers. A large number of efficient bank employees opted for the schemes, but subsequently joined private banks to increase their gains.
State Bank’s has mooted its exit policy at a time when it intends to introduce a gamut of new products and services, including insurance.
“It needs to infuse fresh blood without increasing its payroll cost to be able to match the new generation private sector banks in service and product offering,” said an analyst.
SBI has 209,462 employees on its rolls, of which 25.5 per cent are officers, 48.9 per cent belong to the clerical grade and 25.6 per cent are sub-staff. The scheme, if implemented, will available to all categories.