State Bank of India - The VRS Story

THE POST VRS DAYS

According to reports, SBI's total staff strength was expected to come down to around 2,00,000 by March 2001 from the pre-VRS level of 2,33,000 (Refer Table III). With an average of 5000 employees retiring each year, analysts regarded VRS as an unwise move.

By June 2001, SBI had relieved over 21,000 employees through the VRS. It was reported that another 8,000 employees were to be relieved after they attained the retirement age by the end of 2001. Analysts felt that this would lead to a tremendous increase in the workload on the existing workforce.

According to industry watchers, by 2010, the entire SBI staff recruited between mid 1960 and 1980 would retire. As a result, SBI would not have sufficient manpower to manage over 9000 of its branches. Another major hurdle was the Government's proposal to scrap the Banking Service Recruitment Board (BSRB)^[6] as the bank lacked expertise in recruitment procedures.

TABLE II
CHANGE IN SBI's STAFF STRENGTH

	31-03-01	31-03-00	% change
Officers	52,558	59,474	-11.63%
Clerical	103,993	115,424	-9.90%
Subordinate	53,729	58,535	-8.21%
Total	210,280	233,433	-9.92%

Source: www.indiainfoline.com

In the post-VRS scenario, SBI planned to merge 440 loss-making branches and announced redeploy additional administrative manpower (resulting from the merger of loss-making branches) to frontline banking jobs. SBI also planned to reduce its regional offices from 10 to 1 or 2 in each circle. In August 2001, it was reported that a single officer had to take charge of 3 or 4 branches as the daily concurrent audit got affected.

Departments like internal audit, concurrent audit, monitoring, inspection of borrowals had hardly any staff, according to reports. It was reported that employees working in branches that had a high workload went on work-to-rule agitation, blaming the VRS for their problems. Analysts felt that SBI would have to take serious steps to reorient its HRD policy to restore employee confidence and retain its talented personnel. SBI had many strong organizational strengths and an excellent training system, but due to weak HR policies, it had lost its experts to its competitors.

The employees of almost all the new generation private sector banks were former employees of SBI. The bank's well-defined promotion policy was systematically flouted by the framers themselves and, as a result, employees with good track records were frequently sidelined. Many analysts felt that SBI was not able to realize the critical importance of recognizing inherent merit and rewarding the performers.

The above factors were cited as the major reasons for the success of VRS in the officer cadres, who were reported to be demoralized and de-motivated. The arbitrariness and insensitivity at the corporate level had dealt a severe blow to the employees of the organization. What remained to be seen was whether SBI would be able to reorganize its HRD policy and retain its talented personnel.

QUESTIONS FOR DISCCUSION

^[6] BSRB was set up in 1976 to conduct uniform examinations on behalf of all public sector banks according to their recruitment needs. The Finance Minister enabled PSB's to directly recruit employees and abolished the BSRB in the 2001-02 Budget.