KARACHI, March 11: Habib Bank Ltd., after one year of its privatization, has started making cost cutting moves to become more profitable, sources in the bank told Dawn.
Last week, the bank decided that instead of providing medical coverage to the retiring executives and officers, it will give them a lump sum amount from January 1, 2006. The executives and officers retiring during the current year will continue to get medical facilities afterwards.
Under the new policy, senior executive vice presidents (SEVPs) and executive vice presidents (EVPs) will get Rs500,000 and Rs400,000 each respectively in lieu of post-retirement medical facilities if they retire after December 31, 2005.
Vice presidents (VPs) and assistant vice presidents (AVPs) will get Rs250,000 each. Officers in grade I will receive Rs200,000 and officers in grade II and III will get Rs150,000. At the end of last year, HBL employed more than 1,300 executives and over 8,500 officers. The total staff cost could not be ascertained immediately but bank sources said it was between Rs11-12 billion at the end of 2003 when the total number of employees including executives, officers and clerical and non-clerical staff stood at 18,800.
In addition to revising the post-retirement medical facilities of the employees, the bank has also decided to allow up to 80 per cent of the hospitalization expenses for the parents of its executives and officers. From January 1, 2006, the executives and officers of HBL will have to bear 20 per cent expenses on the hospitalization of their ailing parents.
A letter issued by the Personnel Division of HBL says that from January 1, 2007, the bank will stop financing the hospitalization expenses of the parents of its executives and officers altogether.
All this change in the medical policy of the bank does not affect the clerical and non-clerical staff and its scope is limited only to executives and officers.
A separate letter issued by the Personnel Division makes it clear that HBL executives will have to pay for extra duty availed by the drivers on the bank payroll. The letter says that the bank will deduct from the salary of its executives the over time/extra duty payment made by the bank to the drivers on its payroll if the executives have availed their services after normal duty hours.
In December last year, the bank had outsourced the collection and delivery of daily mail service also to minimize the expenses of its branches and for improvement in the service.
HBL sources say that the bank is also rationalizing the pension and provident fund schemes for its employees tailoring them in a way to put least financial burden on the bank.
All these measures put together, are aimed at enabling the bank to reduce its cost on employees.
