read update on SBI VRS
The SBI board has cleared the voluntary retirement scheme (VRS) for the bank's employees. The scheme, which will be open from January 15 till January 31, 2001, has been drawn up keeping in view the guidelines issued by the Indian Banks' Association (IBA). The scheme will be open to those employees who have completed 15 years of service and are 40 years in age. Employee will receive two months of salary for every year of complete service or salary for the number of years left for retirement-which ever is less.
SBI expects around 10 to 12 per cent of the total 2.32 lakh employees to respond to the scheme. This would imply that a golden handshake to roughly 23,200 to 27,840 employees. It will be an all-cash deal making SBI the fourth bank after Canara Bank, Bank of Baroda and Andhra Bank to opt for full cash payment. The average cost per employee would work out to around Rs 5 to 6 lakhs. The cost to the bank (net of tax) is expected to be around Rs 1,200 crore.
The bank staff strength is close to 2.32 lakhs. Of this, the Class-I cadre comprising officers account for 59,279 employees, clerical cadre account for 1.14 lakh and the subordinate staff numbers 58,329 as on June 30 this year. Staff cost in 1999-2000, amounted to a whopping Rs 4,477.86 crore as against Rs 4,147.40 crore the preceding year.
SBI can use this opportunity to improve efficiency, by reducing the number of layers and becoming a leaner and flatter organization. SBI can put in place a new recruitment policy to gear up for the competition in the banking sector, especially from the private & foreign banks, by going for lateral recruitments.