New Delhi, Sept. 12: The State Bank of India (SBI) is offering an exit option scheme (EOS) to its staff in a bid to weed out older employees and induct younger, better-trained manpower.
Out of the total workforce of 1.98 lakh, SBI has nearly 1.4 lakh clerical and subordinate staff. Of these, some 90,000 — those above 50 years of age — are eligible for the scheme, bank sources said.
The State Bank can fill the vacancies caused by those opting for the scheme unlike in the case of those who had opted for the earlier voluntary retirement scheme (VRS), where the bank was barred from filling up vacancies.
“We plan to draft a fresh recruitment programme after examining the response to this exit option,” said bank sources.
The scheme, which was launched on September 1, will continue for the next six months or so.
“The scheme aims at removing deadwood from the workforce and enhance productivity of the organisation by hiring fresh talent,” State Bank sources added.
Top finance ministry officials said the scheme could be extended to other banks based on how it fares in SBI.
Though it is early days yet, sources said the scheme has not found many takers as yet. The bank is not willing to disclose the number of employees who have already applied for the exit option.
SBI officials said it has no plans to maintain a separate corpus to make one-time payments to employees opting for the scheme.
Under another exit plan for officers which has been operational for several months, some 3,000 people have already opted for early retirement, said sources. It was the success of this scheme that prompted the “bigger experiment with workers”, said finance ministry officials.
The EOS says clerical staff who have not been promoted as officers to the junior management grade scale-I after four chances will be eligible for the scheme. All subordinate cadre employees will be eligible for the scheme.
Apart from the normal terminal dues, employees opting for EOS will receive ex-gratia of 50 per cent of their total salary for the remaining tenure of service, subject to a maximum of 36 months. Under VRS, employees were paid two months’ salary for every year of service or for every remaining year of service, whichever was less.
According to the bank’s internal circular, the salary will include basic pay, stagnation increment, special pay, professional qualification pay, increment on fixed personal pay and dearness allowance.
The bank has also decided to give the exiting employees the benefit of repaying housing loans after retirement. All other outstanding dues to the bank would, however, have to be paid or would be adjusted against ex-gratia.
Moreover, the employee would be allowed to avail of perks such as residential accommodation and telephone till two months after retirement. In such case, 50 per cent of the ex-gratia would be released after surrender of the facilities.
Employees availing of the exit option can also take up assignments with any other subsidiary, associate or joint venture of SBI, subject to prior approval of the competent authority, the SBI circular added.
The target staff, however, isn’t too enthused. One point of disagreement is the age restriction.
An internal circular said the exit option can be availed of by staff who are over 50 years of age but below 58 years as on the date of application, not promoted to next higher grade/scale within four chances but superseded by juniors. As against this, the earlier VRS was open to all employees of the banks who had attained 40 years of age.
A second point of dissonance is the condition on ex-gratia payable on which income tax will apply at the prevailing rates and will be recovered at source.
Under the VRS, the employees were entitled to an income tax exemption of up to Rs 5 lakh. The absence of the tax waiver has also reduced the appeal of EOS.
However, bank officials are optimistic about the acceptance of the scheme and are willing to wait till the end of September before giving any statement regarding the success or failure of such voluntary exit options.