VRS, roadmap to revamp on the cards at IFCI

Institutional sources told Business Standard that the board will consider various alternatives for putting in place a new structure at IFCI as also transfer of bad and doubtful assets to an asset reconstruction company, where players like Life Insurance Corporation and Punjab National Bank have also acquired stake.

Last month, the government released Rs 1,573 crore assistance to IFCI, which will be used to retire high cost retail liabilities as also some debt owed to institutional investors. The amount had been sanctioned in the budget.

IFCI executives said that while releasing the funds the government had prescribed that the institution introduce a VRS scheme for its employees, put a freeze on fresh recruitments and also limit fresh advances.

The board was scheduled to take up the issues for discussion at its last board meeting on September 29 but only cleared the VRS and postponed the other issues to the next meeting, which is expected to be held in the next fortnight.

According to the VRS package cleared by the institution, employees who have completed 10 years of service and are over 40 years of age, can opt for early retirement.

They would be entitled to two months' salary for the remaining years of service or salary at the time of retirement or the salary at the time of retirement multiplied by the balance months of service before superannuation, whichever is lower.

The board also deliberated on extending a pension option to IFCI employees before introducing the VRS scheme as also continuation of medical benefits post-retirement.

While the first package was cleared by the board, directors did not agree on the other proposal. The VRS scheme is awaiting a clearance from the finance ministry. IFCI sources said that the scheme is proposed to be opened for two months from November.

An outgo of Rs 7.5 lakh per employee is estimated with the entire package estimated to cost Rs 55 crore. IFCI Had 717 employees, with 458 of them from the officer grade.