Reduction in staff is a pre-requisite for
privatization
By AMANULLAH BASHAR
June 18 - 24, 2001
The downsizing or rightsizing, whatever you may
call, of the mammoth work force i.e. around 50,000 of the three public
sector banks i.e. National Bank, Habib Bank and the United Bank is
certainly an uphill task before the government. Exactly speaking, the
total number of employees in the three banks is estimated 49,200 which
include 15000 in the NBP, 22,700 in HBL and 11, 500 in the UBL.
The financial advisors appointed by the
Privatization Commission for financial restructuring of the two banks
i.e. HBL and UBL placed on the board for privatization have
recommended a 50 per cent lay off of the existing staff by offering
them voluntary retirement schemes like Golden-hand-shake or newly
coined term of Voluntary Separation Scheme (VSS).
The reduction in the number of branches and number
of staff seems to be a pre-requisite to attract investors in the
banking sector.
The financial restructuring emphasis on the
reduction in the number of staff which cost Rs8 billion per annum to
NBP, Rs12 billion to HBL and Rs5 billion to the United Bank. This huge
administrative cost erodes the profitability of these public sector
entities.
In order to accommodate the surplus staff, the
management of these banks have to increase the number of branches
irrespective to the requirement or need. Against the size of deposit
of Rs316 billion, the National Bank operates with 1428 branches, Habib
Bank with the deposits of Rs266 billion operations with 1755 branches
while the United Bank with the deposits of Rs129 billion operates 1371
branches all over the country. It is interesting to note that with
less number of branches, the NBP have a strong size of deposits of
Rs316 billion as compared to Rs266 billion of HBL which have a much
larger number of branches i.e. 1755. Some of the branches, it is
learnt, were allowed just to please the near and dear ones having to
engage their properties for opening the bank branches. Under the
corrective measures, the government desires to close at least 250
branches in HBL.
The problem of overstaffing in the public sector
entities was the direct result of the growing interference of the
corrupt politicians who used these organizations for dumping of their
supporters through appointments. These banks originally belong to the
depositors or the shareholders. But these stakeholders were never
consulted either before extending huge political loans or before large
number of appointments without taking the merits or demerits into
account. The depositors and the shareholders are now paying the cost
of these discrepancies with slackening of the profits and the
dividends.
It is unfortunate that once being the golden egg
goose, the buyers are now reluctant to buy these banks in the presence
of such a huge financial liabilities.
The management of HBL has offered a Voluntary
Separation Scheme (VSS)-2001 to the employees:
This scheme offers what it calls the special
incentive to the staff who would opt for the scheme. Under the scheme
all those clerical and non clerical staff who joined HBL on or after
August 15, 1991 are allowed a special incentive at the rate of Rs4000
per month for 36 months amounting to Rs1, 44,000/ in lump sum in
addition to the VSS-2001 incentive/ benefits. This scheme was earlier
confined to the staff who joined the bank in August 1991 which now has
been expanded to cover the entire staff of the Bank.
All those executives/ officers who will opt in
favour of VSS will also be allowed salary increase based on their
appraisals for the year 2001 effective January 1, 2001, as and when
announced by the management. After announcement, payment of VSS will
be re-calculated and arrears will be paid to them accordingly.
All those employees governed under the new
retirement benefits and completed 24 years of service as on May 31,
2001 shall be allowed a grace period of one year to become entitled
for monthly pension. This relaxation is only restricted to the optees
under VSS-2001, however it shall not be treated as precedent for other
cases. The Godown keepers may now apply for the change of cadres as
Cashiers. The last date of the offer under VSS was June 16, which was
later extended up June 20.
The CBA of HBL employees however opposed the scheme
and staged a two hours pen down strike to lodge their protest against
the scheme. The employees called off the pen down strike after
meetings with the management and some assurances.
The Secretary of HBL Employees Union (CBA) had also
lodged a complaint with the labor directorate that the VSS is a
violation of the IRO 1969 because the strike notice/industrial dispute
is still held in abeyance. The HBL Workers Front, led by Habib Junaidi
has however has strongly opposed the VSS and has claimed to launch a
countrywide movement against the VSS which he says is an unjust
attempt to dislodge 11000 employees from their jobs.
|
Compative
Data — NCB's for the year 2000 |
|
Bank |
Deposits |
Ratio |
Admin. Exp. |
Ratio |
No. of staff |
Ratio |
No. of bran-
ches |
Ratio |
Staff |
Ratio |
| |
Rs./Bln |
|
Rs./Bln |
|
Emplo-
yee |
|
Bran-
ches |
|
Loans |
|
|
NBP |
316 |
44% |
8 |
32% |
15000 |
30% |
1428 |
31% |
6 |
25% |
|
HBL |
266 |
37% |
12 |
48% |
22700 |
46% |
1755 |
39% |
14 |
58% |
|
UBL |
129 |
18% |
5 |
21% |
11500 |
23% |
1371 |
30% |
4 |
17% |
|
Total |
711 |
|
25 |
|
49200 |
. |
4554 |
|
24 |
|
|
