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May 21, 2001
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Money > Business Headlines > Report May 21, 2001 |
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Banks cry foul as SBI, hit by VRS, defers remittancesGeorge Smith Alexander The State Bank of India seems to be hit hard by the voluntary retirement scheme. Banks across the industry are blaming SBI for losing interest on money transferred from various branches as there has been a major delay in remittance of cash. "At any given point of time there is a backlog of around Rs 10 billion and the reason behind this is the bank's VRS which saw 23,000 employees leaving the bank. Banks are losing interest on this money transferred from the various branches and some of these banks have even filed loss claims to SBI," said a private sector banker. A senior State Bank executive said there were marginal delays in the bank's clearing operations, "but not to this extent". "We have banned overdraft facility to all banks in their clearing accounts. This might have upset some of these banks, which were earlier availing of the facility," the executive pointed out. In some of the non-metro locations such as Pune, Lucknow and Mangalore, where the Reserve Bank of India is not present, SBI runs the clearing operations. In these centres money is moved by the banks through SBI through telegraphic transfers. In normal cases, the transfer takes place on the same day or the very next day. This is now taking more than five days as SBI does not have enough staff to clear these transactions. Some of the problem centres are Pune, Baroda, Surat, Panjim and, to a lesser extent, Jalandhar and Jamshedpur. "SBI is facing an acute shortage of staff. In order to speed up the transfers our staff are also filling in the registers. The paperwork of SBI is being done by other banks; but even after that there are delays in transfer of money," a senior banker in the public sector said. "The delay is creating serious problem as we are losing interest on this amount, while SBI is enjoying the float. We have logged interest claims on the bank for the delay in remittance," said another banker. SBI is facing a problem on the staff front post-VRS as it has not completed the redeployment process. Says the chief executive of one bank, "The VRS in SBI is now affecting the entire industry." Powered by YOU MAY ALSO WANT TO READ:
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