Further, CBI is planning to shift to a three-tier operating structure and will also finalise a five-year business plan shortly. These two points were not part of the Tuesday's board meeting.

The proposed VRS, sources say, may start on February 14 and will remain open until February 28. The bank expects nearly 4,000 employees to opt for the scheme and sees expense on this account to touch around Rs 400 crore.

Said a highly placed CBI source: "This (VRS) was on the board's agenda for a long time. At the last board meeting, the VRS was considered, but due to some reason, it was not passed. The bank's chairman and managing director Dalbir Singh was also on leave".

CBI has a total staff strength of around 49,000, and expects around 4,000 applications. Sources said that the number of applicants may well be more than 4,000.

"I think there are many employees from all categories who are eagerly waiting for the VRS. The response for the scheme may go up to 8,000 applications. And it is for this reason that the board was not introducing the VRS and also largely on account of the fact that this kind of response may increase the expenditure on VRS at over Rs 400 crore and could affect the balance sheet", a senior CBI official said.

CBI's VRS will be almost on the same lines as that of the other public sector banks' schemes based on the Indian Bank's Association's guidelines.

Payment of VRS will be in two parts: 50 per cent in cash, and the remaining in bonds. There will be no VRS for officers in specialist cadre.

The bank is also toying with the idea of pruning its operating structure post VRS period. "This is inevitable in the post-VRS scenario and with the increased use of technology", said the senior CBI official.

As of now, CBI has four levels - branch, regional office, zonal office and head office. There are over 3,000 branches, 77 regional offices, and 17 zonal offices reporting into the head office. There is now a move to trim: both laterally and vertically by reducing the number of branches either by merging them, and or eliminating a few zonal offices. Such a proposal had earlier been suggested by the likes of Batliboi, KPMG Peat Marwick, and ICRA which had acted as consultants to thes bank at various points of time.