ICICI Bank, the second largest commercial bank in the country, on Tuesday announced its first early retirement option. The move comes one year after the reverse merger with parent ICICI.

The voluntary retirement scheme will remain open between July 1 and July 31. The option is available to all employees, who have completed 40 years of age and seven years of service with the bank (and all other entities that merged with the bank) as on July 31.

ICICI Bank is offering three months salary (basic plus dearness allowance) for every year of service completed or the full residual service - whichever is lower.

Employees and their dependents will also receive hospitalisation expenses till the normal retirement age.

The package is capped at Rs 20 lakh (Rs 2 million) for up to joint general managers and Rs 25 lakh for those above the JGM level.

"We have a set of employees, who have spent long years in banking and are around 45-50 years. There is also another set of employees who are unable to cope with the demands of productivity," Kalpana Morparia, executive director, ICICI Bank, said.

"The bank is opening 50-60 new branches this financial year for which we will have to redeploy our staff. However, some of them are not ready to re-locate," she explained.

The bank is now an amalgamation of eight entities ICICI, Bank of Madura, ITC Classic Finance, Anagram Finance, ICICI PFS, ICICI Caps, SCICI and ICICI Bank.

According to sources, the erstwhile employees of ICICI (the FI) and Bank of Madura will be the main targets for the scheme, and not many employees of ICICI Bank will be eligible for it.

Only those employees who joined ICICI Bank in the first two years before July 1996 will be eligible to apply for the VRS. The bank had kicked off operations in 1994.

In its earlier avatar as a financial institution, ICICI had introduced its first VRS in 1996-97. Around 116 employees had availed of the scheme then.

The second VRS came in late 1999. The first two schemes shaved off 10 per cent each of ICICI employees.

ICICI Bank has a staff strength of 11,000 employees, up from 9,500 employees at the time of the merger.