RBB to downsize workforce

Rastriya Banijya Bank (RBB) -- the wholly government undertaking – has announced the seventh phase of Voluntary Retirement Scheme (VRS) to downsize workforce.
The management is hopeful of some 300 employees to take VRS in the seventh phase. "If 300 employees take VRS, we are planning to inject some 200 young blood,” said Janardan Acharya, chief executive officer (CEO) of the bank.
“We are planning to inject some 100 officers and 50 non-officers,” he said, adding that the blending of experienced and young blood could be beneficial for the bank to remain competitive in the market.
Employees who have worked for 15 years or more can put in their papers voluntarily under the VRS. They will be given a golden handshake depending upon the number of years of service and level.
Under the sixth phase of VRS in May 2009, around 69 employees took voluntary retirement making it to a total of 2,740 regular employees.
Under the Financial Sector Technical Assistance Project (FSTAP), the bank had planned to reduce its workforce to 2,870 by the end of 2010. However, it has already exceeded its target last year during the sixth phase of VRS. Currently, RBB has 2,650 employees except outsourced ones.
The VRS idea was floated when the managements of Nepal Bank Ltd (NBL) and Rastriya Banijya Bank (RBB) were handed over to foreign executives in 2002 under FSTAP to re-engineer the two financial institutions and make them competitive in the market, where private banks and financial institutions have dominance.
One of the reform measures undertaken by the foreign management was introducing VRS to downsize these two overstaffed public sector banks.

Capital injection sought
KATHMANDU: Rastriya Banijya Bank (RBB) has asked the finance ministry to inject capital to bring its negative networth to positive. "It has reduced its negative networth to Rs 9 billion,” CEO Janardan Acharya said, adding that the finance minister is also positive on the bank’s request to inject capital. However, delay in full-fledged budget has played spoilsport for the bank’s capital structure plan. "We have presented the finance minister with three options; to inject Rs 9 billion at once, or in stallment for two to three years,” Acharya added. Since RBB is the complete state-owned bank, the government has the complete responsibility for its financial health too.

RBB's VRS
First phase -- 1,267
Second phase -- 225
Third phase -- 140
Fourth phase -- 66
Fifth phase -- 100
Sixth phase -- 69
Seventh phase – announced
Total staffers, who took VRS -- 1,867