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Fresh round of bank golden handshakes

Sidhartha in New Delhi

The government has set in motion the second round of voluntary retirement scheme for nationalised bank employees by clearing Corporation Bank's VRS proposal for its officers.

The bank is currently awaiting clearance from the income tax department to launch the scheme.

However, in order to keep a check on the number of officers opting for VRS, Corporation Bank has decided to open the scheme only for officers who have rendered 25 years of service and are over 50 years old.

Corporation Bank was the only nationalised bank that had decided not to offer VRS to its employees in the first round. It, however, changed its stance after officers went on strike demanding the option to exit.

The compensation will be on the lines of the one given to over 125,000 employees who opted for VRS in the first round where they were entitled to 60 days of compensation for each year of service put in or for the residual service, whichever was less.

Unlike the last scheme that was operational during 2000-01 when banks handed out a liberal package, Corporation Bank has designed the package such that a minimum number of employees opt for VRS.

The banking division in finance ministry cleared the Corporation Bank package earlier this month.

This was despite some reservations expressed by the Corporation Bank Employees Union, which had questioned the manpower plan of the bank and had also said that the scheme was being offered at a time when the bank had recruited some 200 employees.

Some other banks like Bank of India and Central Bank of India are also expected to launch VRS shortly. BoI has already approached the finance ministry seeking permission to launch a second VRS.

With nationalised banks also increasing their dependence on technology, the average bank employee would become redundant and over the next few years these banks will look for specialised manpower, a bank chief said.

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