State Bank of India (SBI) Executive Committee of Central Board (ECCB) approved a Voluntary Retirement Scheme (Second Innings Tap – SBI VRS 2020) for its employees on 28.08.2020.
Broad aspects of the Scheme: Second Innings Tap SBI VRS 2020
- The SBI VRS 2020 scheme is applicable for officers up to the post of Deputy Managing Director (DMD).
- The employee seeking SBI VRS 2020 should have rendered 25 years of service and should be 55 years of age.
- Every year, the employees attaining the age of 55 years can apply under the SBI VRS 2020 scheme, however the VRS shall be allowed at the discretion of management.
- Those who shall be approved under the VRS scheme of SBI shall be paid 50% of salary for the residual period or 18 months salary whichever is less.
- All other benefits like Gratuity, Provident Fund, and Encashment of PL shall be available to employees opting for VRS as available to employees retiring in the normal course.
- Those who are retiring under the SBI VRS 2020 scheme can take assignments with State Bank of India after a cooling period of two years.
Further, it has been gathered that the management is mulling reduction of staff by 50% and hence a SBI VRS 2020 scheme for staff having service of 20 years and more is under consideration. The same is expected by 30.09.2020. The rest of the staff shall be given variable pay having performance-linked components to improve efficiency.
Reaction of AISBOF (All India State bank Officer Federation) on Second Innings Tap SBI VRS 2020
In the letter dated 31.08.2020, addressed to the Deputy Managing Director (HR) & CDO, SBI, Sh. Saumya Datta, General Secretary of All India State bank Officer Federation has shown strong dissent on the Voluntary Retirement Scheme.
Sh. Datta has communicated as under:
“We have been given to understand that the bank has mooted a proposal to introduce a provision for seeking voluntary retirement by officers and employees. This sudden development has come as a shocker to us. Through this communiqué, we are constrained to place on record our views on such an unwarranted development at a time when the entire country is in the throes of the deadly Covid-19 pandemic, amidst other multifarious challenges faced by the Bank.
State Bank of India, being the premier financial institution, is also the flagship bank in the country providing employment as well as catering to the financial needs of approximately 44 crore population., Any impairment at this critical juncture is likely to have telling effect on the banking industry, economy and the most importantly large customer base “from the bottom of the ladder to the uppermost step”, who repose utmost faith in the ‘banker to the nation.
While we strongly denounce the proposed VRS, we are constrained to say that any modification to the service conditions/structural changes in the Bank should only be by way of bilateral discussion. We call upon the Bank not to implement the scheme. Also, we urge upon the management to convene an emergent meeting with the Federation leadership for a detailed discussion on this issue.”The link to complete letter of Sh. Dutta is available under “Sources”
Complete details of SBI Second Innings Tap SBI VRS 2020
The objectives of the scheme are to optimize human resource & cost of the bank, allow respectable exit to employees at the saturation point of career, and to have a balanced age profile in the organization. SBI VRS 2020 further intends to create a balancing tool for manpower exercise on yearly basis.
- Permanent officers & award staff (except mentioned below under head ineligible) who have rendered 25 years of service and attained the age of 55 years.
- SBI officers who have missed three or more promotion processes in the current scale.
- On medical grounds.
- The scheme is also available to employees of associate banks & Bhartiya Mahila Bank merged with SBI in the past.
- The employees working on a contract basis, employees facing disciplinary proceedings/action by banks or Government Agencies, employees under suspension, and employees in the bond period.
- Highly skilled & qualified employees like CA, CFA, ICWA, FRM, CISA Certified.
- The employees to whom skill training has been imparted by banks in the last five years.
- Employees who have held assignments like Chief Dealer, Project Finance, Risk Management, Asset-Liability Management & Specialist officers.
The option to apply under the scheme shall be available from 1st December to the end of February every year. The employees can withdraw the application before 15 days from the closure of the window i.e. 15 days before the end of February.
The final decision in respect of approval of VRS is at the discretion of management. The authorities at various levels have been vested with the powers to recommend & approve applications under the scheme.
Benefits under Second Innings Tap SBI VRS 2020
The employees opting under the scheme shall be paid 50% of the salary for the residual period or 18 months salary whichever is less. The amount shall be credited in the account of the employee within 6 weeks from the date of retirement.
Further comparison of some of the other key benefits are as under:
|Facility||Under regular retirement||Under SBI VRS 2020|
|Commutation of Pension||Yes||Yes|
|Concessional Interest rate||Yes||Yes|
|Permission for employment outside the bank||Yes||Yes|
|Staff housing loan||Yes (can be continued up to 75 years of age)||Yes (can be continued up to 75 years of age)|
- Those who are retiring under the VRS scheme can take assignments with State Bank of India after a cooling period of two years.
- The VRS shall not be the subject matter of any Industrial dispute under the provisions of the Industrial Disputes act. 1947.
- The employees opting under the scheme shall not be entitled to any retrenchment compensation.
- The scheme is without prejudice to banks’ right to dismiss the services of employees under service rules.
- In case of a dispute regarding any terms & conditions of the scheme, the banks’ decision shall be final & binding.
- In the case of VRS, there shall be no Exit Interview as applicable in the case of Resignation & previous VRS rules.
Net Savings for the Bank
As per eligibility conditions, the bank has worked out that 11565 officers & 18625 award staff are eligible under the scheme and the net savings to bank depending upon the percentage of staff opting for the scheme shall be as under:
|Sr. No||Staff opting for SBI VRS 2020||Net Savings to bank|
|1||15% of the total eligible employees||1085.43 Cr|
|2||25% of the total eligible employees||1809.05 Cr|
|3||30% of the total eligible employees||2170.85 Cr|
Further in case, 30% of the staff opted under the scheme, it will result in immediate fund outgo of Rs. 3532.32 cr for the bank out of which Rs. 2903.75 cr has already been provided for by the bank.
Reasons for introduction of Second Innings Tap SBI VRS 2020
One of the main reasons leading to the decision is the Success of the CSP (Customer Service Point) Channel. The lockdown period has proved to be testing time for various alternate delivery channels of banks. The effectiveness of many of these channels has made organizations relook at their manpower requirement.
The Main Features of Customer Service Point (CSP)
- The retailers are appointed to carry out banking services on behalf of the State Bank of India. The retailers can open the No frills saving account of customers at CSP Kiosk outlets.
- The CSP outlets can be used for the transfer of funds to other SBI accounts, deposit/withdrawal of cash, the opening of term deposit, opening of Recurring deposit, opening of self-help group accounts, to avail general-purpose credit card, Kisan Credit Card, etc.
- The CSP outlets further help in loan lead generation and to collect loan installments.
- The transactions are secured with biometric authentication and slips are issued to customers on all transactions.
State Bank of India has observed that the CSP channel has been proved successful during recent lockdowns. The bank has decided to give rights to 6 terminals to one CSP as against 1 terminal allowed till now. Hence, the CSP can engage his family members to deliver services.
Benefits of Customer Service Point (CSP)
- CSP helps bank in building brand equity.
- Substantial cost-cutting due to low operational expenses as the bank is not required to open full-fledged branches.
- Helps in achieving targets for financial inclusion.
- The CSP provides an opportunity for generating self-employment for retailers.
- The retailers may work at their doorsteps.
- The CSP helps in generating income for retailers and help them to be financially independent.
- The customers can avail of banking services nearer to their homes without standing in long queues.
- The services are available for longer working hours as the customer can visit any time until the outlet is open.
- Customers can avail of a whole host of banking services.
- The transactions are secured with biometric authentication.
- The customers can avail of accidental insurance worth Rs. 10000.00 (Rupees Ten Thousand).
- The customers can avail of mutual funds services on a referral basis.
It was apparent that “COVID 19” shall bring some structural changes in the working of organizations & we have started experiencing the same. It is expected that many more organizations will follow the suit and offer similar schemes to their staff members. While the use of technology is bound to improve the efficiency of companies/organizations, the increasing problem of unemployment shall pose a risk to government & society.