The Kolkata-based UCO Bank
has embarked upon a cost-cutting plan that involves branch rationalisation and CASA
The Centre had sent letters to 10 banks, including UCO Bank, asking them to lay out a revival road-map for availing government funds. The letter said some staff benefits could be restructured temporarily.
However, on opposition by unions, salary cuts were not included in UCO Bank’s turnaround plan.
Instead, the plan includes merger of unviable branches, focus on CASA
mobilisation, restrictions in lending to corporate entities, and depending on sectors like agriculture, retail, and micro, small and medium enterprises for loan growth.
This year, the bank was looking at five per cent growth in credit offtake, said RK Takkar, MD and CEO, UCO Bank.
The bank had merged 14 branches and another 15-20 branches would be merged in this financial year, Takkar said.
UCO Bank’s cost of operation has increased by about 17 per cent in the last three years. In April-June 2014-15, the bank’s operating expense was Rs 603 crore, which rose to Rs 703 crore in April-June 2017-18.
posted a net loss of Rs 663 crore in April-June 2017-18, up from a net loss of Rs 441 crore in the first quarter of the preceding financial year. One of the reasons behind the losses were high provisions, at Rs 1,272 crore in the last quarter.
“Salary cuts do not serve any purpose, instead employees need to be motivated to work towards the financial well-being of the bank,” Takkar said.
Recently, one of the zonal heads of the bank had sought suspension of salaries of employees in 11 branches as punishment for non-performance. The unions were quick to react, and the proposal was shot down by the bank’s management.
“In the turnaround plan
signed with the unions, there is no clause of a salary cut. However, we are watching the situation, and we do not see the proposal to stall salaries of some employees as an isolated case. We have protested at UCO Bank
after the idea was mooted,” said Rajen Nagar, president, All India Bank Employees Association.
had an employee strength of 24,620 on March 31, 2017, and the bank had recruited 735 employees in the previous financial year.