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SBI may reduce workforce by nearly 10 pc by 2019: MD Rajnish Kumar
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Meghna Mittal | 11 Apr, 2017
The total workforce of the country's largest lender -- State Bank of
India (SBI) -- will see a reduction over the next two years, after the
merger with six entities, owing to attrition, reduced hiring and
digitisation, a top official said.
"Manpower will go down with
the period of time. Around 10 percent reduction in two years may be a
possibility," Rajnish Kumar, SBI Managing Director, told reporter in an
interview.
The public lender currently has around 207,000
workforce and the merger of six entities -- SBBJ (State Bank of Bikaner
and Jaipur), SBM (State Bank of Mysore), SBT (State Bank of Travancore),
SBP (State Bank of Patiala) and SBH (State Bank of Hyderabad),
Bharatiya Mahila Bank -- from April 1 will add approximately 70,000
employees.
"Post-merger we will be at 2,77,000 people in SBI.
This may come down to 2,60,000 by March 2019. So it may be less than 10
percent. Let us first merge and see the impact of the key process
changes," Kumar said.
He said there would be some actual reduction in headcount along with re-assignment of the roles, but lay-offs are not an option.
"We
have offered voluntary retirement scheme (VRS), there would be natural
attritions and every year we may not replace head by head (replacement
recruitment). Manpower will also reduce as a result of digital
initiatives. There will be a combined effect," he added.
Ruling out layoffs, he said the question does not arise.
"Two
years down the line, these efficiencies will start showing. Reduction
in manpower will depend on efficiency of the merger and branch networks.
Lot of duplication happening will be removed and we will have more feet
on the street (customer outreach programmes)," Kumar said.
Hiring in SBI may not be halted, but will reduce by 50 percent in a year, he said. In 2016-17, SBI hired 19,000 people.
"It
will come down from the previous average of hiring. It could be reduced
by 50 percent. We will return to usual 5,000-6,000 recruitment every
year," he said.
"We cannot stop new hiring because it creates a
lot of gap in the middle management down the line. But full replacement
may not be required. If 13,000 people retire in a year, we may recruit
7,000-8,000 in a year," he added.
Kumar said the bank will continue with its policy of branch expansion, and the associate bank branches will be merged.
"There
is a policy of branch expansion, we are governed by that. We keep on
opening new branches depending on the business potential, that will not
stop. We are working on the plan as to how many branches we will open in
next two years," he said.
SBI MD said there would be ample benefits from the merger in terms of cost-efficiency and rationalisation.
"Treasury
integration, risk management optimisation will happen. It will result
in efficiency gains for the bank. Continuously supporting them with
capital will not be required. Initially, the costs may go up, but in the
next two years... the rationalisation efficiencies will surface," he
said.
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