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Banks to shell out Rs 7,490 cr on VRS

Sarbajeet K. Sen

NEW DELHI, April 9

PUBLIC sector banks would take a hit of about Rs 7,490 crore on account of the recently concluded voluntary retirement scheme (VRS), according to a consolidated picture compiled by the Ministry of Finance. The scheme came to a close on March 31.

A total of 1,26,282 applications have been received by the 26 public sector banks for VRS, representing 15 per cent of the total staff strength of 8,63,117. Corporation Bank was the only one which did not offer VRS.

The estimated cost has been worked out on the basis of the ex-gratia payment that would be doled out to the applicants. This includes all payments under the scheme, excluding cost of terminal benefits for which banks are required to make provisions on an ongoing basis.

Out of the Rs 7,490 crore, the cost for the 18 nationalised works out to Rs 5,373 crore, while for SBI and its seven associate banks (SBI group), it would work out to Rs 2,117 crore.

The average per head estimated cost for the entire set of 26 banks worked out to Rs 5.93 lakh. For the 18 nationalised banks, the average cost has been estimated at Rs 6.70 lakh, while for SBI and its seven associate banks, the figures work out to Rs 6.5 2 lakh and Rs 5.72 lakh respectively.

The response to the VRS offer seems to have been much higher from officers, compared to clerical and other sub-staff.

At an industry-level, while 27 per cent (64,327) of the total of 2,38,116 officers have opted for the scheme, only 11 per cent (49,010) clerical staff, out of 4,33,666, and 7 per cent of sub-staff (12,945) out of 1,91,335, have sought VRS.

Of the 26 banks, 18 have already commenced the process of relieving -- which includes 13 nationalised banks, SBI and four of its associate banks. The 18 banks have accepted and relieved 67,103 employees, while some of the applications are still with a fe w of these banks.

On a bank-wise break-up, SBI's estimated cost for VRS is by far the highest at Rs 1,500 crore. Among the other banks which would take a hit of over Rs 400 crore are Canara Bank (Rs 600 crore), Central Bank (Rs 546 crore), Syndicate Bank (Rs 534 crore), B ank of Baroda (Rs 493 crore), Bank of India (Rs 465 crore) and Punjab National Bank (Rs 417 crore).

Among the other nationalised banks, Allahabad Bank would pay Rs 104 crore, Andhra Bank (Rs 106 crore), Bank of Maharashtra (Rs 180 crore), Dena Bank (Rs 240 crore), Indian Bank (Rs 309 crore), Indian Overseas Bank (Rs 270 crore), Oriental Bank of Commerc e (Rs 47 crore), Punjab and Sind Bank (Rs 130 crore), Union Bank (Rs 292 crore), UCO Bank (Rs 360 crore), United Bank (Rs 150 crore) and Vijaya Bank (Rs 130 crore).

Among the SBI associates, the highest pay-out will be by State Bank of Mysore and State Bank of Hyderabad (both Rs 130 crore) followed by State Bank of Bikaner and Jaipur (Rs 110 crore), State Bank of Patiala and State Bank of Saurashtra (both Rs 70 cror e), State Bank of Travancore (Rs 57 crore) and State Bank of Indore (Rs 50 crore).