Big Payout Plus Pension Keep State Bank’s VRS Optees Happy

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: Nothing really has changed with the country’s biggest state-run bank -- State Bank of India (SBI) -- during the last one year. The bank, with over 9,000 branches spread across the country, shed 21,329 employees last year via a lucrative voluntary retirement scheme (VRS). Of those who left, 7,158 were officers, 11,314 clerks and the rest subordinate staff.

Unlike decisions taken by HR departments elsewhere, SBI’s VRS has been a blessing for thousands. Falling interest rates on savings are not a worry, mainly because of the monthly pension that supplements the huge lump sum payouts. Those who stayed on -- or were not released -- are unhappy to some extent because of the extra workload created by the primitive state of SBI’s technology.

The management itself is quite happy with the outcome, even though the VRS cost it Rs 2,271.24 crore. The bank wrote off Rs 853.19 crore during the financial year to March 31, 2001, and will amortise the rest over the next four years.

SBI chief general’s manager for the Bengal circle, T Keshavamurthy, points out that the huge VRS expenditure can be easily offset by the lower wage bill. "In addition, the VRS has enabled the bank to bring down the average age of the employees. In such a competitive world, one cannot expect SBI to work efficiently with a front-office work force that had an average age of over 53 years," Mr Keshavamurthy says.

He admits that the exodus had affected some areas more than others.

"But we managed to get over the problem by rational deployment of manpower and now SBI is working more smoothly than ever before," he said while denying allegations that the efficient employees had left, leading to an increase in workload for those who stayed on and a decline in customer service quality.

Mr Keshavamurthy points out that the management has now introduced a career-path progression scheme for its award-staff, including clerks as well as subordinate staff. Under this scheme, the award-staff can secure an executive position provided they are ready to move out of their present location. "The scheme has really worked a miracle in enabling us to implement the rational deployment of manpower," Mr Keshavamurthy says.