After being hit by the large quantum of expenses in 2009-10, State Bank of India (SBI) is planning to provide incentives to its employees to check on its operating expenses. The bank also plans to deal with fresh slippages in its non-performing assets (NPAs) on priority basis.
SBI has convened its annual conference of chief general managers (CGMs) to discuss these issues. A top official of the bank confirmed the development and said the bank will be charting out detailed course of action on both the issues.
?This time, our theme for the conference will revolve round formulation of a detailed incentive scheme to help the bank reduce its operating expenses and NPAs,?? he said.
However, the bank wouldn?t cut its expansion plans during the current fiscal.
?The plan is to tell the employees either to boost productivity with the current level of expenses or maintain current level of productivity with lower expenses… We will be adequately incentivising our staff for this,? he said, adding that the bank is also reviewing its operational processes and seeking decisions from professional experts.
While the bank?s net profit in 2009-10 had almost remained flat over the previous year, SBI is looking at a growth rate of 20-25% in the segment during current fiscal, said chairman OP Bhatt.
During the fourth quarter of FY09, nearly 27,000 new employees came on board in various categories. The impact was felt in FY10 in the form of staff expenses. The bank has recruited 3,350 employees in FY10. SBI had also spent Rs 347 crore in opening 1,049 new branches and installing 7,788 new ATMs during the year.
?The sudden change in the Reserve Bank of India?s policy to make ATMs neutral from the customers? point of view also hit our income during 2009-10,?? said the official. SBI?s loan loss provision in the last fiscal went up 108% at Rs 5,147.84 crore as against Rs 2,474.97 crore in FY09.
SBI is still having a surplus liquidity of Rs 35-40,000 crore with itself, out of which it would lend Rs 20,000 to the winners of auctions of 3G services.