SBI plans exit for over 20,000 employees

The new government may have decided not to allow any more voluntary retirement schemes in the banking industry, but India's biggest bank is still taking aim at some 20,000-25,000 of its staff, which it thinks is less productive. 
 
The State Bank of India in consultation with the ministry of finance is preparing an exit policy for some of its under-performers. The objective is to improve productivity at the bank. 
 
Employees in all cadres who were 50 years of age and had not been promoted in the last four attempts would be eligible for the proposed severance package, said banking sources. 
 
The State Bank of India management also wants to ensure that the scheme does not result in productive employees exiting the bank. 
 
Those opting for the exit scheme may not get as remunerative a severance package as those who opted for voluntary retirement schemes. Under the earlier scheme, employees were paid two months salary for every year of service or for every remaining year of service, whichever was less. 
 
State Bank of India is still

working out a package that will be on similar lines. 
 
However, sources said the exact ratio would be worked out in consultation with the ministry. The scheme will not be applicable to employees who have attained 58 years of age. 
 
The exit scheme will target both clerks and officers. It is estimated that about 10-12 per cent of the total work force could meet the terms of this scheme. State Bank of India has an employee strength of around 210,000. 
 
If SBI manages to gets the ministry's clearance for the exit policy, similar schemes are likely to be introduced by other public sector banks in an effort to increase productivity. Each of the banks is likely to come out with its own specific scheme based on costs. 
 
In 2000, State Bank of India offered a voluntary retirement scheme to almost 25,000 employees, along with other public sector banks. 
 
The voluntary retirement scheme norms then allowed employees who had completed 15 years of service and had attained 40 years of age (for non-officers) and 55 years (for officers), to opt for the scheme.