Financial Daily from THE HINDU group of publications
Wednesday, Dec 04, 2002
Money & Banking
Another VRS for banks under study
Mr N. Rangachary, Chairman, IRDA, with Ms Vineeta Rai, Banking Secretary, at the International Banking Summit 2002 in the Capital on Tuesday.
NEW DELHI, Dec. 3
IN a bid to further rationalise staff strength, the Government is considering a second round voluntary retirement schemes (VRS) for public sector banks.
``Some banks have asked for a second round of VRS. It is under examination,'' said Ms Vineeta Rai, Secretary, Banking and Insurance, while addressing an international seminar on banking, organised by Indian Institute of Bankers here.
The first round of VRS helped banks reduce manpower by 12-15 per cent. ``We have not reached the optimum,'' she said.
The public sector banks were able to bring down staff strength by over 1,00,000.
Many banks had said large manpower was putting `strain' on the expenditure and was affecting their profitability, Ms Rai said.
``Banks have been asked to undertake manpower planning and each bank has to assess its own requirements,'' Ms Rai said declining to give any time frame for yet another round of VRS.
She also admitted that after first VRS, the vacancies were filled up by promoting the existing staff with relaxation in the norms, which had ``negated the purpose of VRS''.
Ms Rai said the need of the hour for the banking industry was to address the issues of right size, right attitude and right skills.
Later on the proposed Lenders Responsibility Bill, Ms Rai said as a first step a lenders code had to be evolved and the Reserve Bank of India was working towards bringing out the code as soon as possible.
"Depending on the success of the code the Bill would be framed," she said.
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