NEW DELHI: the Centre will soon announce a special voluntary retirement scheme (VRS) for the employees of public-sector banks as well as Air India, finance ministry sources said. The decision follows the Niti Aayog’s recommendation to this effect, the sources added.
“VRS is under discussion. The Niti Aayog gave similar recommendations for Air India and a state-run insurance company, ahead of their privatisation drive. Many of them are over-staffed. Short manpower makes them more attractive and easier for the change of management,” a senior FinMin official told The New Indian Express.
The government will make the VRS package attractive so that it encourages the employees to go for it, the official added.
Finance Minister Nirmala Sitharaman, while unveiling Budget 2021-22 on February 1, had said the government would take up the privatisation of two public-sector banks and one general insurance company. She also said the government will conclude privatisation of Air India.
According to sources, Central Bank of India, Indian Overseas Bank, Bank of Maharashtra and Bank of India are being considered for privatisation. The government also plans to exit LIC-controlled IDBI Bank.
Meanwhile, bank unions opposing the privatisation move had gone on a two-day strike in March. At that time, Sitharaman assured them privatisation would in fact ensure jobs are protected and that no employee would be fired.
Prepping the ground for privatisation
According to the Central government, the PSBs being considered for disinvestment are over-staffed. The Centre wants to right-size the manpower through VRS, so that these become attractive for the private sector. A tried and tested strategy, VRS was offered ahead of the recentconsolidation of some PSBs