STATE BANK OF TRAVANCORE

(Associate of the State Bank of India)

HEAD OFFICE : THIRUVANANTHAPURAM
HUMAN RESOURCES DEVELOPMENT DEPARTMENT

STAFF CIRCULAR NO:24/2005 12th July, 2005

21 Ashadha 1927
st

PERFORMANCE LINKED INCENTIVE SCHEME FOR BRANCH

MANAGERS, MANAGERS OF DIVISIONS AND AGMs OF REGIONS- AN
HRD INITIATIVE

A performance linked incentive scheme to motivate Branch Managers,

Managers of Divisions at branches and Assistant General Managers who are
controllers of regions is being introduced. The salient features of the Scheme
are set out below.

The Scheme aims at rewarding performers. The following categories of

officers will be eligible under the scheme:

 Branch Managers
 Managers of Divisions (MoDs) at branches &
 Assistant General Managers of Regions

The incentives will be given annually based on business performance and

other specified criteria. In the first instance, the incentives for the year 2005-
06 will be based on the performance for the year ending 31-03-2006 and will
be awarded during 2006-07.

The Scheme operates on the principle of achieving certain benchmarks of

performance and at the present juncture achievement of business and
profitability budgets for the branch are considered as the most non-
controversial and acceptable benchmarks. The inclusion of profit as one of
the criteria is to ensure that an official will not be eligible merely on the
achievement of budgetary goals in deposits and advances alone. Profit is a
derivative of proper mix of the interest rate that is paid on deposits and
received on advances. Moreover, profitability also reflects the concern of the
Branch Manager/Assistant General Manager in controlling costs and
improving other income by increasing non-fund based business.

2. All AGMs who are controllers of regions, Branch Managers and Managers
of Divisions who achieve atleast 100% of their budgeted growth in aggregate
deposits, advances and net profit (not applicable to Managers of Divisions)
during the year ending 31st March will be eligible for consideration. Budget
and achievement for this purpose will be defined as quarterly average of
deposits and advances and net profit (gross profit figure as reported in the P-
Form) for the year.

Further, for Branch Managers and AGMs of regions, there must be at least
75% budget achievement in deposits and advances in all market segments
taken together after excluding the C&I segment. For Branch Managers and
Managers of Divisions the audit rating of their branch should be A or A (+).
Separate criteria regarding audit ratings are stipulated for AGMs of regions.
In addition, there should be at least 50% achievement under the budget for
NPA recovery. The detailed criteria for each category are set out in Annexure
1. These parameters for evaluation may undergo changes in future so as to
keep an element of challenge therein. The respective amounts of incentive
are also set out in Annexure-1.

3. The incentive will be in cash and it is proposed to be given to those who

meet the requirements detailed in Annexure I. The format in which the
details of performance of Branch Managers, Managers of Divisions and
Assistant General Managers of Regions is to be submitted to the Sanctioning
Authority to claim the incentive is given in Annexure-2.

4. The Deputy General Manager of the Zone will be the Recommending

Authority for granting of incentives to Managers of Divisions, Branch
Managers and Assistant General Managers of regions under their control. The
Deputy General Manager (Credit Department) will recommend for grant of
incentives to BMs, MoDs of branches under his direct control. The General
Manager (Operations) will be the Sanctioning Authority. For operational
convenience and to ensure the motivational aspect, all the recommendations
from a Zone must be put up to the General Manager (Operations) in a single
lot as early as possible and in any case, not later than 31st May.

Please bring the contents of this circular to the notice of all staff attached to
your branch/department.

R.G.GADKARI
GENERAL MANAGER (P & D)

Index under:-

Performance Linked Incentive Scheme for BMs, Staff Circular

MoDs & AGMs of regions No. 24/2005
dated
12/07/2005
 ANNEXURE - I
The incentives are proposed to be given on the following scales:-

Incumbency of Branch Branch Manager Manager of Division

Budget achievement Budget achievement
100% and more 100% and more

SMGS-V Rs.24,000 Rs.18,000

SMGS- IV Rs.18,000 Rs.12,000
MMGS-III Rs.12,000 Rs. 9,000
MMGS-II Rs. 9,000 Rs. 6,000
JMGS-I Rs. 6,000 Rs. 4,500

Budget achievement
100% and more
AGMs of Regions Rs.45,000/-

1) For Branch Managers, the incentives will be subject to the

following conditions:

a) For achievement in deposits and advances, budgeted growth and actuals

calculated as quarterly average for the entire year are to be reckoned.
Year-end budget achievement in deposits and advances in segments
other than C&I, taken together, must be atleast 75%. For profit, year-end
achievement of the budget is to be taken.

b) The audit rating of the branch should have been maintained at or

upgraded to A or A+. If the branch has been downgraded from A+ the
incumbent will not be eligible.

c) NPA recovery must be at least 50% of the budget of the branch.

d) The Branch Manager must have remained in that position on 31st March
for 9 months or more.

2) For Managers of Divisions, the incentives will be subject to the

following conditions:

a) The incentive scheme applies to divisions that have budgets for deposits,
advances and NPA recovery.

b) In respect of Managers of Divisions (P&SB, NRE, SIB, C&I & Agriculture) for
achievement in deposits and advances, budgeted growth and actuals
calculated as quarterly average for the entire year are to be reckoned.
Since divisional budgets are not settled for profit this parameter will not
apply.

c) The audit rating of the branch where the division functions should have
been maintained at or upgraded to A or A+. If the branch has been
downgraded from A+ the incumbent will not be eligible.
d) NPA recovery must be at least 50% of the budget of the division.

e) The Managers of the Division must have remained in that position on 31st
March for 9 months or more.

3) For Assistant General Managers of regions, the incentives will be

subject to the following conditions:

 For achievement in deposits and advances, budgeted growth and actuals

calculated as quarterly average for the entire year are to be reckoned.
Year-end budget achievement in deposits and advances in segments
other than C&I, taken together, must be atleast 75%. For profit, year-end
achievement of the budget is to be taken.

 If 10% or more of the branches in their region are having ‘B’ or ‘B (-)’
ratings in the Audit Report Formats as on 31st March or if 25% or more of
the branches of the region audited during the year had slippage in audit
rating or if 25% branches have registered negative growth in P segment
deposits as on 31st March, the AGM will not be eligible. Year-end budget
achievement of the region in deposits and advances in segments other
than C&I, taken together, must be at least 75%.

 NPA recovery must be at least 50% of the budget for the region.

 The Assistant General Manager must have remained in that position on

31st March for 9 months or more.
 ANNEXURE 2
PERFOMANCE INCENTIVE RECOMMENDATION: ZONE:

For the year ended _________________

1. Name of the Branch

Manager/ Manager of
Division / Asst. General
Manager of region: (Posted
since)
2. Name of the
Branch/Region:
3. Grade/Scale of the officer:
4. Name of the Division:
5. Audit Rating of the Branch: Previous: Date: Rating:
Present: Date: Rating:
6. Business development data as at the last day of each quarter (to be
based on P Report figures in Lakhs)
June Sept Dec Mar. Av. Of 4 % Ach.
Qtrs
A B A B A B A B A
B
A.
Aggregat * Aggregate Deposits (ie. excl. inter-bank, office account &
e deposits above card rates)
Deposits
*
B. Gross
Advance * Gross Advances (excluding Bills negotiated under LCs &
s* MIBOR linked loans/advances)
7.Gross Budget : Actual : %
Profit achievement :

8. NPA Budget : Actual : %

Recovery achievement :

9. Additional information ( delete if not relevant)

Aggregate Deposits* Gross
Advances*
Budget for all segments other than C&I -
75% of the above -
Year end figure –

For AGMs of Regions

 Not more than 10% of the branches of the region are having B or B -
ratings.
 Slippage in audit ratings has not occurred in 25% or more of the
branches audited during the year.
 25% or more branches have not registered negative growth in P
segment deposits as on 31st March.

10. I certify that the above data have been taken from the records of the
branch/ region and are correct. I also certify that the year-end
budget achievement in deposits and advances (A & B above) taken
as a whole for the segments other than C&I is over 75% (applicable
to BMs & AGMs only).

Signature of Branch Manager / AGM

(Region- )
11. Aforesaid data have been verified by me and are found correct.
Other terms and conditions of the Scheme are also satisfied. An
incentive of Rs._______________________ is recommended for sanction to
Shri/Ms _________________________________

Recommended