He said the VRS, expected to reduce the headcount by around 15 per cent, will be placed before the board on December 13. Mr Shenoy said that he is in favour of paying the entire VRS amount upfront, in cash.

The cost of the VRS, according to him, will be at the rate of Rs 106 crore for every 1000 employees seeking to enjoy the benefit of the scheme. Mr Shenoy said the aim of the VRS was to "rightsize" and not downsize its current employee strength, which currently stands at 47,054.

According to him, with the current staff strength, BoB has the highest productivity per employee among the leading public sector commercial banks of the country. BoB's productivity per employee currently stands at Rs 1.6 crore.

"However, we now need to compete with the new generation public sector banks whose average productivity per employee is around Rs 4 crore and for that we need to rightsize our staff strength. Mr Shenoy said the bank will enter the life insurance sector, and has engaged DSP Merill Lynch to shortlist an overseas partner for the venture. He said the joint venture will begin as tie up between BoB and the overseas partner, but a domestic partner may be roped in later.

BoB has applied to the Reserve Bank of India for the initial approval, which the management expects to come shortly.

The bank is appointing technology consultants who will help in realising its goal of emerging as a truly techno-savvy bank, Mr Shenoy said. The bank is going ahead with plans to increase the number of computerised branches from 600 now to 1,000. It has a total of 2,050 branches.

Mr Shenoy said the automation will help it provide better customer services in terms of online banking and ATM outlets at such centres. The bank aims to spend Rs 400 crore on expansion during the next 18 to 24 months.

During the first-half of the current financial year, BoB posted a net profit of Rs 278.42 crore. Its net non-performing assets as a percentage of advances is at 6.95 per cent, against the gross NPA of 14 per cent. In absolute terms, the net NPA is Rs 2,200 crore.

According to Mr Shenoy, the bank's focus is on adopting caution in eliminating risks on bad assets, rather than recovering the already accumulated NPA.

BoB has unveiled a three-pronged strategy to face the future challenges and position itself strongly against private and foreign banks. "Our thrust would be introduction of technology, better utilisation of resources and providing best possible services to customers and to survive the onslaught of competition," Mr Shenoy said.

There is no alternative to adopting fast changing technologies and retraining staff would be of utmost importance, he said adding without customer, no service organisation will survive. "Our motto is to put technology and people for best use of customers," Mr Shenoy said.These apart, the CMD said, they would concentrate more on utilising their subsidiaries in mutual fund, asset management and credit card businesses.""We are going to refocus in these areas which has immense potential. Take for example, the mutual fund business, a few years back, was only to the tune of Rs 3000-4000 crore, and now it is worth Rs 1.25 lakh crore and in the years to come it will rival banking industry," Mr Shenoy said.

The CMD said that they will also have focus on credit cards and asset management, which brings sufficient business. Apart from existing Deal BoB and Connect BoB products, the bank will soon launch Omni BoB product.