The associate banks of State Bank of India are likely to unveil voluntary retirement schemes (VRS) for their employees soon as part of the proposed merger with the parent bank -- SBI.
According to a report in the Economic Times, the board of State Bank of Hyderabad (SBH) has already approved the VRS and other associate banks are likely take the scheme before their respective boards in the next few days.
Though details of the schemes are not known yet, the report quoted sources saying that all associate bank employees opting for VRS would get similar benefits. "A good chunk of them are likely to go for VRS as there have been apprehensions across levels about their pecking order under the State Bank of India," the report quoted officials as saying.
While SBI has nearly 2.02 lakh employees, its associate banks have a total headcount of 70,000. State Bank of Hyderabad, which is the largest among all the five associate banks, has around 18,000 employees with State Bank of Patiala having a staff count of around 15,000.
The report also said that VRS in associate banks would help SBI in putting a cap on its incremental rise in expenses, which has seen an uptrend in recent years. SBI's staff expense stood at Rs 6,853 crore in the second quarter ending September, 11 percent over the same period of last fiscal. Its pension liabilities are pegged at around Rs 3,500 crore.
Earlier, managing director of SBI Rajnish Kumar had said that merger of associate banks would not be delayed due to demonetisation process and it would be completed by 2016-17. The central government approved the merger proposal in June this year in order to turn SBI into one of the global biggies in the financial world. Meanwhile, bank unions and officials have raised their concerns regarding the efficacy of merger on financial health of those banks.