MUMBAI, Oct 6: The finance ministry has no plans to introduce a voluntary retirement scheme (VRS) in the banking industry as it feels that state-run banks are not over staffed.

Talking to journalists at the 20th Bank Economists' Conference in Mumbai, additional secretary (banking) CM Vasudev said: "I do not think banks are over staffed...there could be some mismatches... maybe we will require some redeployment..."

Vasudev's statement assumes significance in the context of the functional autonomy being given to public sector banks. The ministry, in consultation with the Reserve Bank, is currently drawing up a plan for giving functional autonomy to profit-making banks.Vasudev's statement has made it clear that state-run banks might be given freedom to "hire" personnel but they will not be allowed to "fire" existing staff. "Banks are not over staffed... so the question of introducing VRS does not arise," he said.

The observations of the additional secretary are surprising as a clutch of public sector banks, led by the Mumbai-based Central Bank and the Calcutta-based Uco Bank, are widely believed to have excess workforce. These two banks are keen to slash the flab."We are considering various aspects of operational freedom. The most important thing could be freedom to deploy resources. With the cut in SLR and CRR and the removal of so many stipulations, banks have huge lendable resources. They should use the resources any way the want...The issue has become very important. We are discussing this with the Reserve Bank," the ministry official said.

On being asked whether the government has plans to give any special status to some of the public sector banks as in the case of the industry ministry's "navaratnas", Vasudev said: "The state-run banks have more freedom than the navaratanas...even now, they enjoy a very high degree of operational freedom. We do not need to give them any special status."

The ministry official also washed his hands off the contentious issue of industry-wide wage pacts. "We have no role to play here. It is purely between individual bank managements and the trade unions. The Indian Banks' Association is the negotiator. If some banks do not want to give the mandate to the IBA to negotiate on their behalf, IBA will not do so. It is up to the banks whether they want to dismantle the industry-wide wage pact...," he said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.