In an attempt to optimize its costs, the State Bank of India (SBI) has planned a voluntary retirement plan (VRS) under which some 30,190 employees are eligible.
The total employee strength of the nation’s largest lender was 249,000 at the end of March 2020, compared with 257,000 a year ago.
According to sources, a draft schema for VRS has been prepared and is awaiting board approval.
The proposed scheme, ‘Second Innings Tap VRS-2020’, aims to optimize the bank’s human resources and costs.
In addition, the draft scheme, seen by PTI, said that it will provide a respectable exit route and option for employees who have reached a saturation level in their career, may not be at the peak of their performance, have some personal problem or they want to develop their professional or personal life outside the bank.
The plan will be open to all permanent officers and staff who have served 25 years of service or have reached 55 years by the deadline.
The scheme will open on December 1 and will remain open until the end of February, he said, adding that applications for VRS will be accepted only during this period.
Based on the proposed eligibility criteria, a total of 11,565 officers and 18,625 staff members will be eligible for the plan.
Total net savings for the bank would be Rs 1,662.86 crore if 30 percent of eligible employees opted for retirement under the scheme, based on July 2020 salary-based estimates, he said.
“The official whose application for retirement under VRS is accepted will receive an ex gratia payment equal to 50% of salary for the remaining period of service (until the date of retirement), subject to a maximum of 18 months of last salary retirement” , He said.
Other benefits such as tip, pension, pension and medical benefits will be awarded to employees seeking VRS.
A staff member retired under the plan will be entitled to hire or return to work at the bank after a two-year reflection period from the date of retirement.
Prior to the merger of the five SBI associates in 2017, the merging subsidiaries had announced VRS for their employees.
In 2001 the bank had also announced VRS with the aim of optimizing human resources.
However, the proposed VRS scheme is not winning favor with the banking unions.
Such a move at a time when the country is in the grip of the coronavirus pandemic (Covid-19) reflects the anti-worker attitude of management, said the vice president of the National Organization of Bank Workers, Ashwani Rana.
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