Postbank set to overhaul operations

By John Njiraini

Despite being one of the oldest banks in the country, the Kenya Post Office Savings Bank, popularly known as Postbank, has largely remained a lame duck in a sector that has witnessed phenomenal growth over the past quarter of a century.

Though in recent years it has tried to catch-up, the efforts have been bogged down by archaic laws governing its operations and which its main shareholder, the Government, seems unwilling to change.

While, so far, its has been able to ditch the infamous ‘passbook’ with its annoying ledger and maintenance fees that it was associated with for many years and joined the card era, critics contend reforms are being undertaken at a snails pace, thus curtailing its growth potential.

Finance Permanent Secretary Joseph Kinyua is flanked by Koigi Nyambura, the Postbank CEO during the launch of the bank’s plastic money. Others officials look on. Photo: File/Standard

As it prepares for its centenary celebrations this year, Postbank finds itself at crossroads —whether to leapfrog or stagnate for another century.

The celebrations come a time when the top management, led by Koigi Nyambura is undertaking a complete overhaul to transform the bank to a modern financial institution.

Embracing reforms

"We are undertaking a total overhaul of our operations to serve our customers effectively," Mrs Koigi, the Managing Director, told Financial Journal.

The reforms include pushing the Government to review the KPOSB Act to expand its mandates, investing in new technologies and downsizing employees perceived to cling to the old order. "We have made many changes and some people cannot cope. We need staff that can manage the systems," said Human Resources Director Sarah Serem.

Last month, the bank embarked on a staff rationalisation programme to lay off employees who cannot fit in the new order.

Using the programme, the bank wants to send home employees who feel they cannot integrate with the new changes implemented in its 91 branches across the country.

According to an internal memo dated December 10, last year and signed by Koigi, the management told its 1,150 staff, the Government has approved an early retirement scheme and those who want to participate can apply.

Lay-offs loom

"This is in reference to previous circulars from this office on organisation re-alignment. The board of directors have developed and approved a voluntary early retirement scheme. Those who wish … ensure that applications are submitted within the deadlines specified," stated the letter obtained by FJ in part.

The letter also outlines the terms of the scheme that include a send off package of Sh150,000 golden handshake, three months basic salary in lieu of notice, one month’s current salary for every year worked, subsidised transport allowance of Sh10,000 and payment of outstanding leave earned.

Though the management hoped the process would be smooth, it has kicked a storm as some employees plot to block it through a court injunction.

Some employees who spoke to FJ said, the management has crafted the scheme but has earmarked about 300 staff who must leave.

"We are not being told directly. The management has made it clear it needs staff who can manage the new systems," said one of the staff.

She added that while most of them are willing to sign up for the scheme to avoid losing benefits if the bank decides to sack them, the send-off package is too little and would still be open to taxation.

The increasing number of employees opposed to the scheme prompted the management to dispatch another memo emphasising that signing up for the scheme was to be a matter of personal choice.

"This is to remind each one of us that participating in the scheme is a personal choice. While exercising your option to participate, the same should be made without influence from other members of staff," stated the letter signed by Serem.

According to Koigi, whatever issues the employees had been raising were finally resolved during a lengthy meeting last Wednesday between the management and their union officials.

"There are no issues anymore. We are just asking those who do not fit in the new order to exercise their right to leave," she said.

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