State Bank of India – The VRS Story

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Presentation transcript:

State Bank of India – The VRS Story By: Harshala Salunke (Roll No.86) Mahesh Toraskar (Roll No. 112)

Site Map Overview Competition Right sizing Strategy (VRS) Reason for redesigning the VRS Post VRS Scenario Consequences Conclusion

Overview Origin – Establishment 1806 State bank group 1-State Bank of Bikaner and Jaipur (SBBJ) 2-State Bank of Hyderabad (SBH) 3-State Bank of Indore (SBIR) 4-State Bank of Mysore (SBM) 5-State Bank of Patiala (SBP) 6-State Bank of Saurashtra (SBS) 7-State Bank of Travancore (SBT)

Overview SBI India’s largest public sector bank In terms of— Reach-Network of branches Customer Base-Revenue Experience-Workforce

Services Offered

Paradigm Shift Technological Advancements -Computerization -Internet Banking -ATM’s Banking Dynamics

Competition Comparison between SBI & some NPBs. Bank NPAs /NET Advances Profit per employee(Rs.in mn) SBI 7.18% 0.43 HDFC 0.77% 0.96 UTI 4.71% 0.69 ICICI 1.53% 0.78 GTB 0.87% 1.2 IDBI 1.95% 1.15

Right sizing Strategy (VRS) To protect business To remain profitable To reduce cost of operations To get rid of the dead woods

VRS Package & response Eligibility – 15 Years of service / greater than 40 years as on March 31,2000 60 Days of Salary for every completed year of service or salary to be drawn by for the remaining period of service whichever is lower. Total 35,000 Applications 19,295 were officer ( 33 % of Total Officers)

Reason for redesigning the VRS To restrict the huge out flow of officers Competence gain by competitor To maintain balance between workforce Process Fixing age bar (increased to 55yrs from 40 Yrs) Eligibility criteria Criticism Formation of SBIVRS optee Officers Association

Post VRS Scenario SBI merge 440 loss making branches Reduced regional offices from 10 to 1 or 2 A single officer had to take care of 3 or 4 branches Acute manpower shortage in departments like internal audit, monitoring, inspection of borrowers Lost experts to competitors

Consequences POOR HR POLICY Stress Among employee VRS outcome Reason Shortage of Man power Stress Among employee POOR HR POLICY VRS outcome Reason Required more Working capital Increase workload

Conclusion SBI objective of VRS were defeated To get rid of the dead wood Improve functioning of organisation The VRS strategy demoralized and demotivated the existing employee by fear of increasing work load

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