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State Bank of India – The VRS Story

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

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State Bank of India – The VRS Story

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

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

  3. 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)

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

  5. Services Offered

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

  7. Competition • Comparison between SBI & some NPBs.

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

  9. 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)

  10. Reason for redesigning the VRS Reason • 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

  11. 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

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

  13. 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

  14. THANK YOU

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