State Bank of India, country’s largest bank, is expecting to see 50 percent or about 6,000 employees opting for its voluntary retirement scheme (VRS).

A senior executive of SBI said, “The employees opting for VRS is on expected lines. We have estimated about half or 50 percent of the employees taking that option. You can say about 6,000 employees may opt to take it up.”

The VRS has been offered to about 12,000 employees of the associate banks.

“The scheme will be on offer till April 5 and those employees who have opted or applied for the VRS can withdraw it thereafter in a week’s time..so we have to wait and see how many apply,” said Dinesh Khara, Managing Director at SBI.

The eligibility criteria for the proposed VRS is employees who are on the payrolls of the bank and have put in 20 years at the bank or are above 55 years.

Eligible employees will be paid an exgratia sum amounting to 50 percent of the salary for the residual period of service, subject to a maximum of 30 months salary.

SBI will be merging its five associate banks with itself from April 1 to become the 45th largest bank in the world.

The five associate banks of SBI are State Bank of Bikaner & Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad.

The associate banks have a total strength of 73,270 employees while SBI has a total staff of 200,820. SBI has a high attrition rate, with 12,750 leaving the bank during the current financial year.

Earlier, SBI Chairman Arundhati Bhattacharya had said there would be about 26,000 employees retiring in the next two years.

The bank has also recruited about 7,000 employees.

Post the merger, SBI will trim its new hiring to 50 percent from about 10,000 on an average annually.

SBI will also shut 47 percent of its associate bank offices to avoid duplication and overlapping of the services in the same regions.

Out of the five head offices of the associate banks, only two will exist. The remaining three will be unbound along with 27 zonal offices, 81 regional offices and 11 network offices of the associate banks.

With this, about 1,107 employees are estimated to be directly affected by these shutdowns and will be redeployed, mostly in customer-interface operations.

According to Khara, many may not be willing to relocate and some may not be comfortable with the changes in the bank.

The VRS in the subsidiary banks would help SBI limit its staff costs from rising after the merger.

SBI’s staff expense in the quarter ending December 2016 was Rs 7,137 crore, rising 16.5 percent year-on-year.

Its pension obligation is estimated to be around Rs 3,500 crore. This would increase once associate bank employees come under the SBI fold.

Reports suggest SBI is likely to see an average payout of Rs 12 lakh to Rs 15 lakh depending on the VRS applications.

The five associate banks will cease to exist as legal entities and become a part of SBI from April 1, but the various data and other merger processes will start only after April 24, once the balance sheets of the five entities are audited and added.

After the merger, SBI will have a combined balance sheet size of Rs 41 lakh crore, with 22,500 branches and 58,000 ATMs servicing over 50 crore customers.

Comments

Disclaimer :The opinions expressed within this Story is the personal opinions/source of the author. The facts and opinions appearing in the Story do not reflect the views of State Herald and State Herald does not own any responsibility or liability for the same.
SOURCEMoney Control
SHARE