Employees will be recruited in banks on a contractual basis, similar to the Agnipath scheme.
In fact, reports have confirmed that the State Bank of India will be launching a separate company that will take care of issues related to human resources.
Read on to find out all the details!
SBI’s Cost Cutting Measures: New Company To Handle HR Issues
To cut costs, the country’s largest public sector bank, State Bank of India, is planning to establish a separate company to handle human resource issues.
The Reserve Bank of India recently granted in-principle approval to State Bank’s operations and support subsidiary (RBI). Initially, the company will manage the staff of rural and semi-urban bank branches.
According to banking experts, the bank’s goal in taking this step is to reduce its cost-income ratio. This is due to SBI’s extensive network of bank branches throughout the country.
Salaries accounted for approximately 45.7 percent of SBI’s total operating expenditure in the first quarter of the current fiscal year 2022-23, while retirement benefits and other provisions accounted for 12.4%.
All India Bank Officers Association Joint Secretary DN Trivedi stated in this regard that all employees appointed through State Bank Operation Support Services will be on a contractual basis. All benefits that are available to SBI’s permanent employees will not be available to contractual employees.
Will Other Banks Follow Suit?
This new system will have an impact on the entire banking industry. SBI Operations Support Services will be the Indian banking industry’s first-of-its-kind subsidiary. However, other banks can now take steps in this direction as well.
According to sources, several banks had already proposed to the RBI to establish such subsidiaries, but the RBI refused. However, now that SBI has granted permission, other banks can seek RBI approval for such subsidiaries to carry forward their old proposals once more. As a result, it will be a new restoration scheme similar to Agnivir.
Individuals enrolled under the Agnivir scheme will be paid an Agniveer package of Rs 30,000 per month with a fixed yearly increment. Besides this, the risk and hardship, dress, and travel allowance will be paid.
After completion of four years, the Agniveers will be eligible to receive the Seva Nidhi package which will be the accumulated amount of their monthly contribution to the corpus fund plus the government’s contribution with interest. Also it will be exempted from the income tax.
Employees will be recruited in banks on a contractual basis, similar to the Agnipath scheme. In fact, reports have confirmed that the State Bank of India will be launching a separate company that will take care of issues related to human resources. Read on to find out all the details! SBI’s Cost Cutting Measures: New Business, agniveer, SBITrak.in