Nashik Bank VRS offer gets good response

One hundred and forty-eight employees of the beleagured Nashik People's Co-operative Bank have opted for voluntary retirement scheme (VRS) offered by the bank.

The Reserve Bank of India (RBI) had suspended the board of Nashik People's Co-operative Bank for violation of RBI norms for distributing loans and high non-performing assets (NPAs). Finally, the bank was put under an administrative board last year.

Meanwhile, the Nashik Merchants Co-operative Bank (Namco) has shown interest in the troubled bank and sent a proposal for merger to the administrative board of People's Bank.

A panel of the administrative board of People's Bank is meeting Patangrao Kadam, co-operatives minister, on November 23 at Mantralaya to discuss a financial package by the state government for the bank.

"The bank has 12 branches and 340 employees, including 13 senior officials, 34 junior officials, 208 clerks and 85 peons. The bank spends Rs 21 lakh per month on salaries of its employees. A large staff strength and high non-performing assets (NPAs) are the main obstacles for merger of People's Bank with other banks. So the administrative board had earlier decided to retrenchment staff. As part of this move, the administrative board had introduced VRS for the bank employees.

"Out of 340 employees, 148 employees have applied for VRS. The compensation for the bank employees accepting VRS will be from Rs 2 lakh to Rs 6 lakh as per their age and service period," a bank official said.

"The Namco Bank has sent us a merger proposal and it will soon send its panel to study the bank's assets and its financial condition. We have already sent them related documents for study," sources from the administrative board said.

Currently, the NPA of the People's Bank has come down from 46.75 per cent to 42.48 per cent. After the appointment of the administrative board, the outstanding loans of the bank have come down from Rs 123.52 crore to Rs 94.32 crore.

Currently, the bank has fixed deposits (FDs) amounting to Rs 175 crore. The administrative board is also planning to close down its three branches at Satpur, Pimpalgaon and Musalgaon, and shift their operations from Nashik Road, Dwarka and Mahatmangar, respectively. This proposal will be tabled at the bank's annual general meeting, sources said.