IDBI board decides on VRS - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

IDBI board decides on VRS

Feb 7, 2000

The Industrial Development Bank of India (IDBI) has decided to have in place a Voluntary Retirement Scheme (VRS) for its employees. It has also decided on the payment of market related salaries to its employees. IDBI, is India's largest development finance institution and has been traditionally concentrating on project finance. It reported a turnover of Rs 74.6 bn for the year ending March'99.

Both these proposals were cleared at a board meeting of the institution held on the 31st January, 2000. As IDBI wants to retain good talent it has to raise compensation levels as they have been facing exodus of valued employees. Currently, IDBI's pay structure is linked to that of Reserve Bank of India, since the former is a statutory body and does not come under the Companies Act. However as there is a wide variation in salary levels for government owned institutions and the private sector this step by IDBI would have to be taken sooner or later.

Also they have chalked out a VRS scheme for those employees who are unable to meet working standards expected by the organization. The VRS of IDBI covers employees of all ages and compensation offered would be according to age and the remaining years of service.

As these institutions are over-staffed and have strong unions, the incentive to be productive is very low resulting in inefficient operations. These two moves by IDBI is necessary to retain productive and efficient employees.

Besides IDBI there have been other public sector banks also chalking out voluntary retirement schemes recently to increase their efficiency levels and this trend is likely to continue. How far these schemes are successful will depend on the co-operation from the strong bank unions.

IDBI has to keep up with the changing market environment and compete with players who are more efficient and have leaner organisation structures. As the finance sector has become more competitive to survive in this scenario they have no choice but to take such measures.

Market View:
As the market is still concerned about IDBI's NPA's it has been rated as a "SELL" by many analysts.


Equitymaster requests your view! Post a comment on "IDBI board decides on VRS". Click here!

  

More Views on News

IDBI BANK Announces Quarterly Results (4QFY20); Net Profit Up 102.8% (Quarterly Result Update)

Jun 1, 2020 | Updated on Jun 1, 2020

For the quarter ended March 2020, IDBI BANK has posted a net profit of Rs 1 bn (up 102.8% YoY). Sales on the other hand came in at Rs 56 bn (up 2.5% YoY). Read on for a complete analysis of IDBI BANK's quarterly results.

IDBI BANK Announces Quarterly Results (3QFY20); Net Profit Down 37.7% (Quarterly Result Update)

Feb 12, 2020 | Updated on Feb 12, 2020

For the quarter ended December 2019, IDBI BANK has posted a net profit of Rs 58 bn (down 37.7% YoY). Sales on the other hand came in at Rs 49 bn (down 10.1% YoY). Read on for a complete analysis of IDBI BANK's quarterly results.

CAMS IPO: Should You Apply? (IPO)

Sep 18, 2020

Does the company having 70% market share of the mutual fund registrar business have sound prospects?

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

IDBI BANK SHARE PRICE


Sep 18, 2020 (Close)

TRACK IDBI BANK

  • Track your investment in IDBI BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
  • Add To MyStocks

IDBI BANK - FEDERAL BANK COMPARISON

COMPARE IDBI BANK WITH

MARKET STATS