KATHMANDU, Aug 3: Agriculture Development Bank Limited (ADBL) is launching voluntary retirement scheme (VRS) for its staff members from Sunday in a bid to cut down long-term overhead expenses. The scheme is expected to retrench the workforce by around 300.
According to Tej Bahadur Budathoki, CEO of the bank, the scheme is open for both permanent and temporary staff members.
The state-controlled category ´A´ financial institution currently employs 3,190 permanent staff and around 300 temporary staff.
“We have already notified staff members about the latest retrenchment plan. Those who wish to get enrolled can file an application by Sunday,” Budathoki said. “Employees who are qualified for the VRS will start getting payment from Sunday itself.” The bank has currently allocated a sum of around Rs 420 million for the scheme, Budathoki said. “The sum was mobilized through internal sources.”
As per the scheme, non-officer level employees, who are qualified for the scheme, will get a lump-sum amount equivalent to 1.5 months of basic salary and grade for every year the person has served the institution. Officer level staff, on the other hand, will get amount equivalent to 1.4 months of basic salary and grade for every year the person has worked.
Agriculture Development Bank had last launched the voluntary retirement scheme around one and half years ago. During that time, 227 staff members had applied for early retirement.
The voluntary retirement schemes that the bank is launching are part of the second phase of the Rural Finance Sector Development Cluster launched by the Asian Development Bank in 2004, under which the bank, among others, had expressed commitment to cut down the workforce.
The bank, which is the second largest in terms of asset, is currently 51-percent owned by the government. Of the remaining 49 percent share, 30 percent has been issued to the public, another 14.14 percent was distributed among its debtors in 2007, and 5.86 percent of the shares were given away to the bank´s staff.
Lately, the government is working on reducing its stake to 21 percent by divesting additional 30 percent share that it holds in the bank. The bank´s latest attempt to divest 30 percent shares will help it raise fresh capital and expedite the capital restructuring plan as prescribed by the Asian Development Bank.