Country's largest lender State Bank of India (SBI), which reported its lowest quarterly numbers in the past one decade, has said that its pension liability is more than Rs 11,700 crore as on March 2011.
Consequent to revision in wages in accordance with the Ninth Bipartite Settlement and the proposed amendment to the SBI Pension Fund Rules, the Pension liability of the bank for the year ended March 31, 2011 as determined by the independent actuary amounted to Rs 11,707 crore, SBI said.
Thus, the bank made additional provision of Rs 7,927.41 crore from the reserves over and above the requirement Rs 3,779.7 crore for 2010-11.
Besides, gratuity liability of the bank determined by the independent actuary for the year ended March 31, 2011 estimated at Rs 1,965 crore was also provided for.
Rise in wage cost was one of the reasons for the sharp decline in the net profit for the fourth quarter ended March 2011. SBI's profit plunged by 99% to Rs 20.88 crore from Rs 1,866.60 crore in January-March 2010. This is the lowest ever fall in the net profit in past one decade.
For the entire fiscal ended March 2011, the net profit slipped by 10% at Rs 8,264.5 crore as compared to Rs 9,166.05 crore in the previous fiscal.
The total income, however, rose to Rs 97,218.9 crore in the fiscal against 85,962.07 crore for FY10.
Despite a dismal performance, the bank maintained a dividend at 300% for 2010-11. The bank will pay a dividend of Rs 30 per share on face value of Rs 10 after shareholders approval.
Source ; Business Standard.
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