In a bid to cut costs, Catholic Syrian Bank has decided to reduce the retirement age of its officers from 60 years to 58 years with effect from April 30, 2019.
The Kerala-based private sector bank, in which Canadian billionaire Prem Watsa’s Fairfax India Holdings Corporation owns a majority stake, currently has 114 employees aged 58 years and above.
In a circular, the bank, which was established in 1921, said that officer employees, who have already completed 58 years and above/ will be attaining 58 years as on May 1, 2019, will be relieved from service on superannuation/ retirement with effect from April 30, 2019.
“The board…has now taken a policy decision…This circular may be treated as notice to all concerned officer employees…All officer employees are advised to go through the circular carefully,” said the circular.
CVR Rajendran, MD and CEO, observed that salary expense is very high for the bank, accounting for 23 per cent of income against the industry average of about 10 per cent. The bank has about 3,000 employees on its rolls.
This move, however, has not gone down well with the All India Bank Officers’ Confederation. According to Soumya Datta, General Secretary, the move is anti-employee and will further vitiate the industrial relations climate in the bank.
“When the industry-wide retirement age is 60 years, the bank cannot unilaterally reduce it to 58 years….This is the most unsettling and retrograde decision, disrupting the life of several officers who had planned for a normal retirement at 60 years. We will explore legal options to challenge this arbitrary reduction in retirement age,” said Datta.
The AIBOC leader sought the intervention of the Department of Financial Services in this matter.
Rajendran said though the average salary in his bank is above industry average, at about ₹11 lakh, productivity is low. Hence, the bank has embarked on a transformation path to revive its fortunes.