NBL brings fourth phase of VRS

KATHMANDU: Nepal Bank Ltd (NBL) has announced its fourth phase of Voluntary Retirement Scheme (VRS) from Tuesday.

"NBL employees who have worked for 20 years or more can put in their papers voluntarily," said said Laxmi Raj Poudel, human resources chief. "They will be given a golden handshake of two-and-a-half months' salary for each year of their total service.”

The bank management has estimated that the VRS phase will cost around Rs 800 to Rs 900 million.

"The estimate stands correct if 1,000 employees will take VRS," he said adding that the number of employees who take VRS might be smaller than 1,000.

"Unlike the earlier three phases of VRS that were supported by the World Bank's Financial Sector Technical Assistance Project (FSTAP), this VRS will be funded by the bank itself," Poudel added.

The VRS idea was floated when the management of NBL and Rastriya Banijya Bank (RBB) was handed over to foreign executives in 2002 under FSTAP to re-engineer the two financial institutions and make them competitive.

One of the reform measures undertaken by the foreign management was introducing VRS to downsize these two overstaffed public sector banks. RBB has also implemented VRS five times and is planning a sixth phase.

At present, NBL has an employee strength of around 3,400. Assuming that 1,000 take VRS — that may not apply, however — the bank will in the next five to six years face a human resources crunch. "We have planned to induct around 300 young employees," he said adding that the bank has already planned on how to cope with the situation five years down the line.

Similarly, Agriculture Development Bank Ltd (ADBL) also announed VRS for the fourth time to reduce its workforce. Nepal Rastra Bank, the central bank, has also implemented VRS under the financial sector reform programme.