Allahabad Bank aims for 3000 job cuts

Allahabad Bank aims for 3000 job cuts

CALCUTTA, NOV 22: Allahabad Bank expects to reduce its staff strength by at least 3000 with the help of the comprehensive voluntary retirement scheme (VRS) cleared by its board. The Calcutta-based bank has 22,000 employees on its rolls, of which 6,813 are officers and the rest, staff or sub-staff.

The VRS, scheduled to open on December 1, will be offered to all permanent employees who have completed 15 years of service or 40 years of age as on December 31, 2000. However, certain sections will not be allowed to opt for the VRS.

It will not be offered to specialist officers and employees who have executed service bonds and have not completed them, those serving abroad under special arrangements or bonds and, employees and officers against whom disciplinary proceedings are being contemplated or who are under suspension.

Employees appointed on a contract basis are not eligible for the VRS. The bank will also not consider VRS applications from highly skilled and qualified employees who have been given specialised training in credit, foreign exchange, investment and IT.

The bank's board cleared the VRS on September 30, along with the sabbatical leave scheme. The scheme is valid up to March 31, 2001.

Applications for the VRS will be accepted from December 1 to December 31, 2000. The last date for submitting option under the sabbatical leave scheme is March 31, 2001.

An official of the bank told The Indian Express that the management is yet to chalk out the exact cost to be incurred under the proposed VRS scheme. According to the official, an internal committee of top officials will scrutinise applications and finalise the cost of the VRS."Before finalising the cost of VRS, the committee will also review the bank's branch network and the age pattern of the staff," the official said.

He also pointed out that if the response is up to the management's expectations, the recurring cost will be reduced to a great extent. "The positive impact experienced will be long-term rather than short-term," he said.

An employee seeking VRS will be entitled to either 60 days salary for each completed year of service, or salary for the number of months left, whichever is less. Salary is defined as basic pay, plus stagnation increments, plus special pay or allowance or dearness allowance.

Those opting for the VRS will also get gratuity or service gratuity, pension and leave encashment as per rules.

As for the payment, half the ex-gratia amount will be paid in cash and the rest may be given in the form of bonds issued by the bank. The bonds will be for a maximum of five years with the interest rate equal to that paid on similar term deposits. Those who are not keen to accept the VRS immediately can avail themselves of the sabbatical leave scheme for five years, which can be further extended by another term of five years.

After the sabbatical leave is over, the employee may re-join the bank at the post and pay level enjoyed at the time of opting for the scheme. The period of sabbatical leave will not be considered for increments or qualifying service for pension and leave.

BoM kicks off Rs 125 cr VRS plan
PUNE: Bank of Maharashtra has started its Rs 125 crore VRS scheme to reduce staff strength by 1500 and bring down the age profile at the bank. The VRS scheme will be open for one-and-a-half months till December 31, 2000.

The bank has a strength of 16,000 and is seeking to reduce 10 per cent of the workforce. The average age profile is 40 years with more than 800 people in the 56 to 60 years age group. Around 250 employees will be retiring this year. BOM's staff expenses is around 23 per cent of the total costs. The average staff expenses of PSUs is 20 per cent while that of new generation private banks only four per cent. "These banks are technology savvy from day one but we cannot change overnight. But the use of technology is increasing and we will have to be more lean and efficient," Anant K Bhoomkar, GM (personnel, IT and security) said. The 1204 strong branch network also makes it difficult to reduce numbers. "We plan to raise per employee productivity from the current Rs 1.14 crore to Rs 2.5 crore by 2003," Bhoomkar said.