As many as 2,800 employees of State Bank of India Ltd.'s (SBI) associate banks have opted for the voluntary retirement scheme (VRS) that was launched last month, said SBI Chairman Arundhati Bhattacharya.
The VRS scheme had been announced ahead of the April 1 merger of five associate banks and Bharatiya Mahila Bank with SBI. Around 12,500 employees at the associate banks are eligible and the deadline to opt for it ends on Wednesday.
Employees who have completed 20 years of service and are at least 55 years of age are eligible for the scheme. No employees with “specialised” functions can opt for the VRS, said Bhattacharya at a press conference on Monday.
SBI sees an attrition of around 13,000 employees each year, said Bhattacharya, adding that there was no need to offer a VRS for the parent bank's own employees “at this point”. Officers who's roles may become defunct after the services are aligned, will be given the option of choosing their next roles, she added.
The merger with the five associate banks is expected to be completed by May 27, leading to the formation of a banking behemoth. Bharatiya Mahila Bank has already been merged completed.
The re-organisation will be completed by April 24, while the data merger is expected to conclude on May 27, said Bhattacharya. The associate banks' shares have already been merged with those of SBI and their treasuries are also working as one.
A portal has been opened for employees of associate banks to choose their preferred locations. So far SBI has received 15,000 applications.
Bhattacharya expressed surprise that there are several applications for remote and under-banked locations like the North East.
The five associate banks to be merged with SBI are: State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, State Bank of Patiala and State Bank of Hyderabad.
Also Read: SBI To Relocate 1,800 Branches Following Merger With Associates
No Nasty Surprises
Reassuring the shareholders, the chairman said the lender will not reveal any “nasty” surprises on the bad loans front for the fourth quarter ended March. The bank has provisioned Rs 8,600 crore to align the asset quality of its associate banks, she added.
The provision coverage ratio, an indicator of the level of provisioning as a percentage of the total bad loans, for the merged entity stood at around 59 percent at the end of the December quarter, said B Sriram, managing director of SBI.
Also Read: SBI's Associate Banks: From A Princely Past To A Blue Chip Future
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