PANAJI: With Rs 68 crore of accumulated losses, the Goa State Co-operative Bank (GSCB) is trying to come out of the red by closing down loss-making branches and reducing the number of staff, revealed a senior bank official on Tuesday.
The bank official said that the apex co-operative bank has plans to close down six loss-making branches and reduce the number of employees by 100-125.
The Reserve Bank of India has given permission to close down Poinguinim and Patradevi branches while permission for the closure of Amona, Zuarinagar and Orlim branches is yet to be received, he added.
Speaking to ‘The Navhind Times,’ Anant Chodankar, managing director, said that 64 employees have opted for voluntary retirement scheme (VRS) and added that there are more staffers who are in excess.
“The bank has achieved partial success in one month with VRS scheme that ended on December 15, 2016,” he said. The current staff strength of GSCB is 480 employees.
Recently, members of the administrative committee governing the co-operative identified excess staff as one of the factors adversely affecting profitability and increasing costs.
“The staff strength is far in excess due to the option of core banking and advanced platforms,” said the committee, which estimated the annual cost of maintaining excess staff at around Rs 7.5 crore.
Chodankar said that with the 64 employees agreeing to take VRS, the savings in cost would be in the region of Rs 5 crore annually.
He said that more employees will be encouraged to opt for VRS to bring the staff to optimal levels.
Meanwhile, the bifurcation of GSCB from its Daman and Diu branches is likely to be completed in financial year 2017-18.
However, even this bifurcation is not likely to be without capital expenditure to the GSCB as it will have to contribute to the capital structure of the Daman and Diu branches.
“The capital outgo from GSCB to Daman and Diu branches is under calculation,” said Chodankar.
In January 2018, a state focus paper prepared by the National Bank for Agriculture and Rural Development (NABARD) had said that GSCB’s business is shrinking and the total business has decreased by 10 per cent in 2016-17.
The reduction in business was together with negative CRAR of -0.63, said the focus paper. Affected by non-performing assets (NPAs) due to mining loans, the GSCB in 2016-17 recorded a loss of Rs 14.85 crore and accumulated a loss of Rs 67.8 crore.
The bank has been recording a loss since the year 2012 and its profit during the year 2013 was purely on account of reversal of provisions. The total capital requirement is estimated at Rs 80 crore of which the government has approved Rs 20 crore.