Post its voluntary retirement scheme (VRS), BoB has decided to rationalise its branch network and merge nearly 10 per cent of its branches with other branches. BoB has a branch strength of over 2,600 branches and nearly 250 to 300 branches will be closed by the bank in the next two to three years. The bank has also decided to close the zonal offices and will have a flat structure and will also promote officers to positions that have become vacant after the VRS. The bank has around 300 loss-making rural branches with a total loss of Rs 30 crore.

BoB chairman and managing director PS Shenoy said, "The bank has received around 6,700 applications for its VRS scheme which closed on February 14. We are giving the option of a full cash benefit. The VRS expenditure will be around Rs 700 crore. The bank has decided to amortise one-fifth of this amount this year and the balance in the coming fiscal."

Mr Shenoy also stated that this will not increase the burden on the bank's balance sheet because of the 40 per cent attendant tax benefits in this fiscal. It will save salary expenses in the coming fiscal also. Meanwhile, BoB has decided to meet around the end of this week to deliberate on its prime lending rate after the Reserve Bank of India announced a 50 -basis points cut in the bank rate and cash reserve ratio. BoB had recently revised its deposit rates.