Privatisation-Bound Public Sector Banks Likely To Roll Out Attractive VRS Scheme For Employees

State-run banks that are set to be privatised this fiscal year are likely to come out with an alluring voluntary retirement scheme (VRS) for interested employees.

This new initiative is slated to make banks attractive to buyers which could be taken over by the private sector enterprises that are eager to get into the country’s banking sector.

VRS, a mechanism through which employees are provided an opportunity to take early retirement along with a good financial package, has also been previously put to use for the consolidation purposes of certain public-sector banks (PSBs), Times of India reports.

Central Bank of India, Bank of Maharashtra, Indian Overseas Bank and Bank of India are a few PSBs that are rumoured to have been recommended for privatisation by the NITI Aayog to a high-level committee headed by Cabinet Secretary Rajiv Gauba.

Union Finance Minister Nirmala Sitharaman declared in her Budget speech earlier this year that the central government has set a disinvestment target of Rs 1.75 lakh crore in the current financial year.

Two PSBs and a solitary general insurance company are proposed to be privatised to meet this objective.

Additionally, the Union Cabinet led by Prime Minister Narendra Modi also gave its in-principle approval for the transfer of management control and strategic divestment in the LIC-controlled IDBI Bank.