KATHMANDU, Aug 8: A total of 328 employees of Agricultural Development Bank Limited (ADBL) have applied for voluntary retirement scheme (VRS), beating the retrenchment target of 300 set by the category ´A´ financial institution. Of these employees, 303 are permanent staff members and the rest are temporary.
The state-controlled bank, which had started accepting applications for the scheme from the third week of July, had said the scheme was open for permanent as well as temporary staff members.
The bank currently employs 3,190 permanent staff members and around 300 temporary staff members.
“We will start handing over the amount to all those who have applied for the scheme in a day or two,” Tej Bahadur Budathoki, CEO of the bank, told Republica.
Although the bank had earlier said it would formally start distributing amount to employees soon after the deadline for filing applications for the scheme expired on Sunday, it was not able to do so due to administrative delays, Budathoki said.
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.
Of those who have filed application for the voluntary retirement scheme, 221 are officer level staff members; the rest are non-officer level employees.
“We hope around Rs 400 million will have to be spent to bid goodbye to these staff members,” Budathoki said, informing that the exact amount would be derived in a day or two.
“Although the amount that is being spent on workforce retrenchment is quite huge, we hope it would reduce our overhead cost in the long run,” Budathoki said.
Staff related expenses at the bank stood at Rs 2.2 billion in fiscal year 2010/11. It spent Rs 1.7 billion on staff remunerations in the first nine months of the last fiscal year ended July 15.
The scheme launched by ADBL is 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 had last launched the voluntary retirement scheme around one and half years ago. During that time 227 staff members had applied for golden handshake.
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 are allocated for the bank´s staff.
The government is currently laying the groundwork to shed additional 30 percent stake in the bank, which will bring down its shares in the institution to 21 percent.