• PAGE ONE
• INDEX
• HOME

PSB experiment with saving shoppes comes a cropper

Srikala B.

BANGALORE, Feb. 25

SHEDDING flab is not an easy task. And some of the public sector banks will vouch for that! Not only are their employees unwilling to take up VRS (voluntary retirement scheme), even the banks' efforts to re-deploy them in `saving shoppes' have run into t rouble.

Several banks, including Syndicate Bank, had planned to set up saving shoppes in major cities to effectively use their excess workforce. The idea was to set up the centres, which would have a retail focus, in residential locations in major cities. The ba nks expected that the saving shoppes, set up on lesser space with a workforce of a handful, would not need the approval of the Reserve Bank of India.

But the central bank, according to banking industry sources, has made it clear to the managements that the saving shoppes will be treated as branches.

As a result, the banks are less than enthusiastic about the saving shoppes now. Syndicate Bank, for instance, which set up its first shoppe nearly six months ago, has only added seven such shoppes so far.

If treated as branches, the shoppes will turn out to be expensive, defeating the whole purpose, says a public sector banker. Even Mr. K. V. Krishnamurthy, Chairman and Managing Director of Syndicate Bank, points out that saving shoppes in residential loc ations have been proposed mainly to redeploy the workforce. Giving them branch status will not be cost-effective for PSBs.

``If treated as branches, you will need to have a sub-staff and whole lot of other amenities. That was not our intention,'' says Mr. Krishnamurthy.

But what has irked the public sector banks is that the ATM centres set up by Citibank under its Suvidha project have not been treated as branches on the grounds that they are unmanned branches. Sources in Citibank argue that since the bank does not use t hese ATMs for directly selling or processing transactions, the exemption is justified.

But the public sector bankers are less than happy about the whole affair. For now, they have to go back to their board rooms to find new avenues to deploy excess staff!