Rupee Bank board of administrators suggests drastic staff, salary cuts

Salary to be slashed by 50%, workforce by 60%; bank has pending recoveries worth Rs 2,000 cr at present.

By: Express News Service | Pune | Updated: January 6, 2016 5:33:30 am
Rupee Bank board , Rupee Bank board, salary deduction, staff crunch, pune news Bank officials speak to account holders at the Shastri Road branch of Rupee Bank on Monday after RBI imposed restrictions on withdrawal limit. Arul Horizon

The three-member board of administrators of the troubled Rupee Cooperative Bank has decided to drastically reduce both the numbers and benefits of its employees. Addressing the media in Pune on Tuesday, board member Mukund Abhyankar said that the measures suggested include a salary cut of 50 per cent and reduction of workforce by 60 per cent.

Back in 2013, the Reserve Bank of India had issued financial sanctions against Rupee Bank in view of its precarious financial health. Before the appointment of the present board, Sanjay Bhosale, a senior officer of the Cooperative Commissionerate was appointed its administrator. Abhyankar and others were appointed last year. At present, the bank has pending recoveries of around Rs 2,000 crore.

Abhyankar said that the employee strength of the bank is 553. “In 2013, the total employee strength of the bank was 902. Some 205 employees had availed the voluntary retirement scheme(VRS) introduced by the then administrator. The bank has an yearly expenditure of Rs 31.25 crore on staff salaries,” he said. Rupee Bank has around 40 branches in the state.

Speaking about the need of such drastic measures, Abhyankar said that as no banking operations are carried out, the employees do not have any work as such. “The RBI in its instructions have repeatedly asked for reduction of employee strength and drastic reduction of employee cost. Moreover, previous talks of merger with the Corporation Bank and Saraswat Bank had failed as they had backed out due to the large staff strength of Rupee Bank,” he said.

Previous attempts to reduce the staff strength had failed due to technalities not followed by the previous boards of administrators. Abhyankar said that the Apex bank has been asking for linking salaries of the employees to recovery of bad loans, which is not permissible under wage agreements.

Other than reduction in staff strength and salaries, the board of administrators are also proposing a reduction of leaves, stopping allowances and discontinuing loan facilities of employees. Asked about the possiblity of a merger, Abhyankar said that no such talks are going on at present.

For all the latest Pune News, download Indian Express App