Financial Daily from THE HINDU group of publications
Saturday, Jun 08, 2002

Port Info

Group Sites

Home Page - Public Sector Banks
Money & Banking - Manpower

BoI to cut 5,000 more jobs -- Second VRS in another 3 months

Rajalakshmi Menon

MUMBAI, June 7

BANK of India proposes to cut another 5,000 jobs in the next three months through a second VRS.

An official said the bank would prune its staff by 12 per cent. In the last VRS a year ago, the bank reduced staff strength by around 7,000. Bank of India currently has over 45,000 employees.

According to senior bank officials, the bank is expected to offer its second VRS in the next 2-3 months.

The VRS is expected to be offered to all its employees including officers and workmen staff above 40 years of age.

Last year's VRS scheme amounted to a total outgo of Rs 1,000 crore for the bank. The cost per employee was to the tune of Rs 6.5 lakh.

The second VRS is expected to cost the bank, roughly the same amount in the proportion of employees that will opt for the scheme.

The average age profile of employees in BoI is expected to be reduced to 42 years from the present 47 years.

Said one senior bank official, "Though we have an existing policy in place, we will have to fine-tune this to make it more attractive for the employees. Once the scheme is formulated, we will get the requisite permission from the RBI.''

Several commercial banks including the State Bank of India (SBI) had recently stated an intention to go in for a second round of VRS. Bank officials had said that around 30 to 40 per cent of its staff were expected to be surplus in the next four years after the bank had in place its technology plan.

This works out to around 75,000 employees in SBI with a total staff strength of around 2,15,000.

As per the VRS scheme formulated by IBA last year, employees with 15 years of service or 40 years of age could opt for the scheme.

Those who could not apply for the scheme were those against whom disciplinary action was pending or those who were specialists.

As per the VRS package, employees were offered two months of the gross salary for every completed year of service or two months gross salary for every remaining month of service, whichever is less.

A total of 1,01,500 employees of 26 public sector banks opted for the VRS. The average ex-gratia cost per employee was around Rs 7 lakh.

Currently, the total number of employees in PSU banks is around 7,50,000.

Send this article to Friends by E-Mail

Stories in this Section
Tatas may relent on VSNL investment row -- `Final decision today'

Freight on imported crude likely to go up
Tata Infotech net down 45 pc in fourth quarter
Aussie miner plans to invest $10 m in gold exploration
Indian promoters of pvt banks can hold 49 pc
Panic withdrawals from select branches -- GTB sees foul play; to seek RBI action
BoI to cut 5,000 more jobs -- Second VRS in another 3 months
Seamen's PF board seeks relief package
Bankers wary of creating customer profiles

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | Home |

Copyright 2002, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line