STATE BANK OF INDIA

VRS CASE STUDY

By: SAURABH AMBASELKAR
SBI Group
SBI Introduction
•Public Company (60% Government-Owned)
• Incorporated: 1921 as the Imperial Bank of India
•Employees: 200,299
•Total Assets: $104.81 billion (2003)
•Stock Exchanges: Mumbai, Kolkata, Chennai,
Ahmedabad, Delhi, New York London
•Ticker Symbol: SBI
•NAIC: 522110 Commercial Banking
SBI Introduction
•The State Bank Group has
•131 foreign offices in 32 countries across the globe.
• 21,000 ATMs and SBI group(including associate
banks) has about 45,000
• SBI has 26,500 branches, including branches that
belong to its associate banks.
•SBI alone has 13,076 branches, including the
branches of State Bank of Indore, as of 26 August
2010.
SBI Financials
Revenue 133,851 crore (US$29.05 billion)
Profit 11,733 crore (US$2.55 billion) (2010)
Total assets US$ 323.0 billion (2010)
Total equity US$ 18.5 billion (2010)
Owner(s) Government of India
Employees 200,299 (2010)
SBI Products and Services
Personal Banking
•SBI Term Deposits SBI Loan For Pensioners
•SBI Recurring Deposits Loan Against Mortgage Of
Property
•SBI Housing Loan Loan Against Shares &
Debentures
•SBI Car Loan Rent Plus Scheme
•SBI Educational Loan Medi-Plus Scheme
SBI Products and Services
Other Services
•Agriculture/Rural Banking
•NRI Services
•ATM Services
•Demat Services
•Corporate Banking
•Internet Banking
•Mobile Banking
•International Banking
•Safe Deposit Locker
•RBIEFT
•E-Pay
•E-Rail
•SBI Vishwa Yatra Foreign Travel Card
•Broking Services
•Gift Cheques
 SBI VRS Case

• Approved by SBI board in Dec 2000.

– FICCI’s report
• Cost cutting initiative
– VRS
– Increase its revenue from fee-based services.
• Faced Protest
– Face severe opposition on Feb 2001
Pros and Cons

PROs
Cost reduced.
Solution to the problem of overstaff.
Explored new talent.

CONs
Loss of valuable Human resource.
Acute manpower shortage.
Decreased efficiency.
Increased the work load on existing workforce.
Effect QWL.
Adversely effect customer service.
Alteration in VRS scheme

REASON
•To restrict the out flow of HR.
•To maintain balance between workforce.
•To reduced the work load.

PROCESS
•Fixing age bar.
•Restriction regarding eligibility criteria.

CRITICISM
•Formation of SBIVRS optee officers ‘ Association.
•Media verdict on SBI decision.
•Cost cutoff may lead to defame.
Consequences
Shortage of Stress
Man power Among
employee

POOR HR
VRS outcome Reason POLICY

Required more
Increase Working
workload capital
Reason For Revamping HR policies

•Restoration of employee and existing talent.

•Loss of competent employee.

•Competence gain by the competitor.

Post VRS Scenario

•SBI merge with 400 loss making branches

•Redeploy additional man power

•Reduced regional office from 10 to 1 or 2

•A single officer had to take care of 3 or 4 branches

What could have been done….

A good VRS, should be demographically aligned, based

on age and competency profile of the employees,
should have a clear-cut manpower plan and should be
driven by keeping in mind future strategies of the
business.
Says HRD consultant J B Kabra of Mind Movers
Management Consultants, “To nullify the psychological
impact on employees’ lives, banks could have provided
them with alternative means of employment. The
optees could have been employed alternatively in the
co-operative sector banks, who constantly need staff
who can work in shifts.”
What could have been done….

One of the alternatives to VRS is the Sabbatical Scheme:

here, the employees were allowed to go long leave
without pay with an aim to cut costs. They were also
assured help in getting jobs elsewhere. But this scheme
raised issues about the promotion procedure for those
who would return. Many “returnees” expected
promotions to be on par with other colleagues.
 Conclusion

The VRS strategy show both the aspects of HR policy of

SBI . It succeeded in decreasing the workforce which
solve the problem of overstaffing ,on other hand it
demoralized and demotivated the existing employee
by increasing the work load and by hardening first
rules.

Source: http://www.banknetindia.com/issues/bsvrs.htm
http://www.slideshare.net/rubuna/sbi-vrs-policy
THANK YOU