LAHORE, Dec 23: The State Bank of Pakistan (SBP) will soon introduce golden handshake scheme for its senior officials (assistant director and higher) under the banking restructuring plan, it is learnt.

The scheme, already approved by the Central Management Team (CMT), is to be formally approved by the SBP board of directors which meets on Dec 29, sources said.

Only those officials with 20 years or above service will be eligible to apply under the voluntary scheme. They will be paid 100 per cent commutation as decided under the plan, sources said.

Those opting for the scheme will also be paid 10 salaries against their medical allowance.

The bank has already introduced the scheme for its employees up to Grade-II.

The move is being seen by the local bankers as a step to further shrink the public sector banking before its privatization under the instructions of the world donor agencies.

The National Bank of Pakistan (NBP) has already reduced the strength of its staff from 22,000 to 14,000. To bring it down further, for making it feasible for buyers, the management has also introduced a golden handshake scheme.

It is learnt that so far 3,500 NBP employees have opted for retirement under the scheme whereas the management wants to get rid of as many more staff to bring down its strength between 6,000 to 6,500.

The step will deprive people living in far-flung areas of banking facilities in their neighbourhood as the NBP and other public sector banks are closing down their branches.

The ongoing developments in the financial sector show that after privatization of public sector banks the banking facilities will be limited only to a specific class as is the case with the existing private sector banking institutions.