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April 18, 2001
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Money > Business Headlines > Report April 18, 2001 |
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UBI may amortise Rs 3 billion VRS cost over 5 yrsDebjoy Sengupta United Bank of India, one of the largest Indian public sector banks, has completed processing applications of the rest of its employees opting for the voluntary retirement scheme. It will release 400 award staff and the rest of its administrative staff in two weeks from now. The VRS will cost the bank Rs 1 billion. UBI is also considering applications of officers who did not withdraw their application for the same and complete the difficult task of releasing these employees as soon as possible. United Bank had earlier released some 900 employees of a total of 1330 opting for the scheme at Rs 2 billion. Thus, with the release of 400 award staff and 30 administrative and officers from other categories, the entire VRS process would be completed this month. According to sources, UBI's outlay of Rs 3 billion for its VRS would be amortised over five years, as laid out in RBI guidelines. But for the outgo of funds for the VRS, UBI is expected to make an operating profit of Rs 1.40 billion this fiscal. The VRS payout would pull down its operating figures and the bank may slip into red once again after four consecutive years of operating profit. Another Rs 700 million is also due to employees under a wage hike granted in 1997. The bank had earlier promised to pay it over three years but this was not done. With all the employees being released, manning rural branches would become a problem, said trade union sources. UBI has already closed a few branches and the fresh outgo is expected to lead to more branch closures and mergers. Employees expect a large number of transfer orders to correct the problem in different departments and branches. This, however, should be done in consultation with the unions, commented the general secretary of United Bank of India Employees' Union, Barun Biswas. Powered by YOU MAY ALSO WANT TO READ:
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