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M. Somasekhar

Hyderabad , Dec. 29

SYNDICATE Bank has formulated a new `Sabbatical Leave' package, including attractive sops to its employees. It palns to implement the package from early 2004, according to its Executive Director, Mr K.M. Shet.

The package includes Sabbatical leave from a minimum of two years, extendable up to 4 years, during which period the employee who has opted for it would be eligible for 25 per cent of his pay packet.

Another big sop being offered is in the housing loans, wherein the instalments payable would be kept in abeyance during the period of the sabbatical leave.

Giving details of the proposed scheme in an interview to Business Line, Mr Shet said subject to the clearance of the Government, the bank expected to save at least Rs 50 crore annually, with around a 1,000 people anticipated to go on the Sabbatical leave.

Mr Shet said several other features had been built into the scheme to attract employees. Interestingly, the bank's earlier effort at such a move in 1999 got very poor response, with less than 200 going for it.

The reason was "less lucrative with no salary, perks during the Sabbatical," he said.

The Manipal-based, Syndicate Bank has hit on this idea as its internal reviews have thrown up a surplus staff strength of between 2,500-3,000 in its nearly 27,000-strong all India network.

The Voluntary Retirement Scheme (VRS) it implemented a few years ago resulted in an outgo of 6,300 employees at a cost of Rs 580 crore, funded through internal resources.

The bank's technology initiatives, being implemented with Rs 150-crore funding, and judicious use of infrastructure and personnel, have thrown up this excess number. The bank was not in favour of another round of VRS, hence the Sabbatical leave, Mr Shet said.

Referring to the initiatives in bancassurance, the Executive Director who was in Hyderabad reviewing the bank's activities, said, encouraged by the response to its recent tie-up with Bajaj Allianz, the bank was examining a tie-up with the General Insurance Company.

Since October 20, the bank has sold 1,300 policies and has targeted revenue of Rs 1 crore by March 31, 2004 under the alliance with Bajaj Allianz.

A team of customer relations personnel were being trained to meet the demands of the competitive market and "in the next 3 years, we expect to do a business of Rs 5 crore to Rs 7.5 crore in life insurance itself and foray into non-life through strategic alliances," Mr Shet said.

Its Centralised Banking Solutions seeks to network 225 branches by March 31, 2004. The project is on course with about 150 branches in various stages of implementation of the technology solutions.

"We hope to provide single window, officer-oriented, 8-10 counter big branches to be technology driven and provide efficient service to the customers," he said.

Asked if the Bank proposed to further bring down the interest rates on housing loans or follow the lead by some banks to take the rates northward, Mr Shet said "We will not bring the rates further down".

There has been a 40-per cent growth in our housing sector portfolio.

On non-performing assets (NPAs) reduction and recoveries, Mr Shet said the bank had reduced the NPAs from 5.64 per cent to 4.89 per cent and was on road to further bringing them down.

It was in the process of shortlisting credible agencies, which can both guard and realise/recovery from properties seized.

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