The Hindu Business Line : IOB keeping options open on second VRS

INDIAN Overseas Bank (IOB) has an open mind about introducing second round of voluntary retirement scheme (VRS), according to its Chairman and Managing Director, Mr S.C. Gupta.

"The Government has given permission to decide at the individual bank level the issue of second round of VRS, but we have not decided anything as yet," Mr Gupta told newspersons, after inaugurating an ATM, the bank's 57 such outfit in the country, here on Friday. "That does not mean we have closed the option; the issue is open as of now," he added.

In the first round as many as 3,200 employees at various levels opted for VRS in the bank, bringing down the total workforce to 24,500. The VRS, Mr Gupta said, created some imbalance which had been corrected in the past year through large-scale promotions. More than 1,500 employees in different grades have been promoted, 600 of them from the clerical to officer levels.

Asked if further computerisation of operations would not render more employees surplus necessitating yet another round of VRS, Mr Gupta replied that the bank would try to strike a balance through redeployment. Currently, 77 per cent of the bank's operation had been computerised and this would be stepped up to 100 per cent by March 2004. "Even after full computerisation, some operations will still be left for manual handling," he added.

Mr Gupta felt that there was enough business for banks pursuing market-friendly and customer-friendly policies. This also called for motivating the employees. "With these objectives in view, we have decided to involve almost all sections of our employees to step up loans for retail and trade segments and mid-corporates," he said, pointing out that big corporates had alternative avenues open to them for mopping up resources without opting for bank finance.

In the current financial year, the bank proposed to advance an additional loan of Rs 2,200 crore, of which Rs 800 to 900 crore would come from retail segments.

Mr Gupta identified the recovery of NPAs, the reduction of the cost of deposits and achieving 15 to 16 per cent as the thrust areas, pointing out that the bank proposed to achieve a recovery of Rs 350 crore in the current financial year, of which cash recovery alone would be about Rs 225 crore. The cost of deposit had been reduced from 7.29 per cent to 6.9 per cent and in the first quarter of the current year, current and savings banks deposits amounted to Rs 350 crore out of the total deposit of Rs 850 crore mobilised during the period.

Referring to the effort to achieve the targeted growth, he said unlike in the past when the large chunk of the growth used to be in the last quarter, the emphasis now was on achieving growth on a monthly basis.

The Ordinance on securities would be relevant only in those cases where the bank could lay its hands on proper securities. Withdrawing court cases might not serve the purpose in respect of all disputed accounts. "We are now in the process of identifying accounts which could be dealt properly under the Ordinance," he added.

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