Money & Banking

Indian Overseas Bank links payout of additional benefits to branch staff with performance

Vinson Kurian Thiruvananthapuram | Updated on October 23, 2019

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Indian Overseas Bank (IOB) has decided to link payout of a list of additional benefits for staff members with performance against a series of parameters at the end of every month through the remainder of 2019-20.

This is being initiated with a view to improving the efficiency and commitment of the staff towards growth in business, said a circular issued by the Industrial Relations section of the Human Resources Department of the bank and reviewed by BusinessLine.

Benefits 'on line'

The list of additional benefits listed include monthly reimbursement of (i) conveyance allowance (ii) telephone/mobile rental charges (iii) cost of newspapers, and (iv) entertainment charges, which are extended to 'enable staff members improve their efficiency and perform well to improve the bank's business.'

Officers are given all four benefits with a ceiling on the amount payable depending on their cadre. The award staff members can claim only conveyance allowance and reimbursement of the cost of one newspaper.

But now, it has been decided to withhold the above-listed benefits to staff members attached to branches if there is non-performance/under-performance as defined in detail in the circular.

Branches are given monthly targets in terms of growth CASA (Current Account/Savings Account); opening of Savings Bank/Certificates of Deposits (SB/CD) accounts; sanction of jewel loans and housing loans; and NPA recovery and OTS (one-time settlement) sanctions.

"Every staff member attached to the branch is required to work for achieving the opening SB accounts, improvement in CASA and disbursement of jewel/housing loans, besides NPA recovery and OTS sanctions," the circular said.

List of parameters

The following will be the parameters to determine the performance of the branches at the end of every month in the remaining period of the financial year 2019-20:

1. The outstanding under SB and CD accounts should not fall below the outstanding as on March 31, 2019.

2. The total number of accounts opened under SB and CD during the month should not be below the average number of accounts opened for a particular Region in the respective category.

3. The outstanding under the housing portfolio should not fall below the outstanding on March 31, 2019.

4. Similarly, the outstanding under the jewel loan portfolio should not fall below the outstanding on March 31, 2019.

5. Branch NPAs at the end of the month review should be lesser than the end-level of NPAs outstanding as on March 31, 2019.

If a branch fails to achieve the above parameters, all eligible four benefits will be withheld. However, in case of a failure to achieve any specific parameter, allowances will be withheld to staff members attached to that branch as follows:

"In order to restore the benefits restored, staff members should work hard and improve the branch business and achieve the relevant parameters for three continuous months," the circular said.

On achieving sustained growth, the benefits may be restored to staff members with prospective effect. The respective Zonal Manager will be the Competent Authority for (taking a decision on) such restoration.

"These stringent measures have been proposed to improve business as well as compel the staff members to actively involve themselves to work for improving growth of business at the branch to enable the bank to come out of the PCA (Prompt Corrective Action) framework in this year of resurgence," the circular said.


Effective from October

The (performance) review shall be made effective from the current month of October 2019 (as on October 31, 2019). However, the implementation of withholding of these additional benefits will be effective from January 1, 2020.

For the first month of October 2019, if any branch is not performing as per the listed parameters, the staff attached to that branch will be put on notice 'to strive hard for improved performance.'

Again, at the end of the next month (as on November 30, 2019), a review will be made and staff members will be put on notice again for the second month, the circular said.

During the subsequent monthly reviews commencing from December 2019 (as on December 31, 2019), if any of the branch has still not achieved the list of parameters, the staff members will be denied eligibility for reimbursement of the additional benefits for the month of December that becomes due for payment on January 1, 2020.

This ineligibility will continue to hold till they improve branch performance for the next three months, which requires that the growth should be a sustained one, the circular said.

Published on October 23, 2019

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