SBP: Early retirement incentive scheme
It appears that SBP's management has decided to
infuse young and highly qualified personnel in the Bank
By Abdul Rahman
Sep 11 - 17, 2000
Downsizing or rightsizing of staff is talk of the
day. Government is trying to reduce the staff employed in the
Government Departments to curtail administrative expenditure so as to
narrow the gap between its earnings and spending. During the past
three decades a substantial portion of appointments were made on
political grounds. It was then customary to make appointments against
existing vacant posts in the Government Departments or even to make
appointments by creating superfluous posts at the recommendations of
Elected Representatives of constituent Assembly of the ruling party.
Further in general all the elected Governments of the past tried to
accommodate candidates of opposition party and offered them or their
relative's lucrative jobs in Government Departments to acquire
political gains at the cost of countries hard earned Resources. These
activities almost continued for three decades and adversely affected
country's economic growth. With the lapse of time the gap between
Income and Expenditure widened and it became necessary for the country
borrow more and more from abroad and International Agencies like IMF
and World Bank, to contain Budget deficit. Due to piling up of Foreign
Debt it has almost become impossible now to obtain further debt at
soft terms. Institutions like IMF and World Bank are now reluctant to
release any aid package free of any terms and conditions. Downsizing
of the Staff and Restructuring of the staff has also been suggested by
IMF. for controlling the budget deficit.
Present Government from the very beginning is
paying acute attention for re-structuring and downsizing of staff in
the Government Departments and Government owned organizations.
State Bank on the analogy of the Government also
worked out an "Early Retirement Incentive Scheme" for its
employees/officers with a view to reduce the number of employees of
the Bank. The Scheme was very wisely prepared and introduced which
offered minimum benefits to employees/officers opting for early
retirement under the scheme.
1) Employees were offered at maximum 2 years
salary in advance who had leave balance of two years or more. The
benefit was however subject to adjustment according to leave balance
available in an employee account, if his leave balances is less than 2
2) Employees who had completed 25 years
service were allowed to make voluntary option for early retirement
under the scheme.
3) Employees leaving more than two years
remaining service were not allowed any extra benefit for the remaining
service. In the previous Golden Handshake Scheme of the Bank the
benefit of remaining service was allowed to the retiring employees.
4) Employees retiring under the Scheme were
also allowed for encashment of Medical facilities, Benevolent Fund
Grant and others as follows:
a) Medical Facilities = Full Monetized
Salary x 10.
b) Benevolent Fund Grant in lump sum for a
period of ten years.
c) A wristwatch worth Rs.6600/- or Prize
Bonds of the same value at the option of retiring employee.
d) Officers Gr.4 and above were also allowed
post retirement benefits viz. Rent ceiling, Petrol ceiling, cost of
The Scheme had mixed impact as only 280 options
were received by the Bank out of which 274 options were accepted.
However, the presumption that all the officers of 58 years age would
opt for the scheme went wrong. As a number of officers, who had
attained the age of 58 years and had sufficient leave balance at their
credit did not opt under the above scheme.
A rough break-up of employees relieved under the
above scheme is as under:
1) Assistant Directors / Asstt. Chief Managers
2) Dy. Directors / Dy. Chief Managers 8
3) Joint Directors 10
4) Director / Additional Directors 9
5) Officer Gr. 2 and Below 158
The break-up of approximate additional benefits
excluding the normal retirement Benefits offered to the different
grade officers is indicated below:
The scheme can be termed as most successful from
the Bank's point of view as it offered minimal financial benefits to
the retiring employees. The benefit of encashment of Leave standing at
the credit of the retiring employee subject to maximum of two years
formed the major portion of financial benefit. Despite a little extra
benefit was offered by the Bank, it was successful to reduce 274
members of its staff.
All the employees voluntarily opted for premature
retirement. However, it is strange to note that on the one hand the
bank is introducing early retirement scheme and on the other hand
recruitment of officers is continuing. It appears that State Bank's
management has decided to infuse young and highly qualified personnel
in the Bank. It is premature to say at this juncture what would be the
outcome of this scheme. Only time will tell what impact the scheme had
on overall efficiency of the bank's personnel.