In effect, the bank plans to offer a three-year wage-holiday to its employees to enable them to search for new jobs in the industry. If unsuccessful, they will be allowed to come up to the bank's fold.

Under the scheme, the bank is also planning to send employees to other banks or institutions on deputattion for a maximum period of three years. Once the deputation period is over, they will be absorbed by the bank. The scheme will give bank employees an "alternative employment option" for a three-year period.

Disclosing the new scheme to mediapersons on Friday, Syndicate Bank chairman-cum-managing director KC Krishnamurthy said: "The idea is to reduce the existing flab without introducing a voluntary retirement scheme (VRS) as it is not financially viable."

The bank's board has already approved the scheme. "This scheme will help us in reducing over overhead cost temporarily," he said.

According to bank officials, employees at all levels opting for the scheme will have the liberty to look for alternative employment and can return to the bank after a minimum period of two years if unsuccessful in finding a new job.

"During the leave period, all monetary benefits of employees will be suspended. Employees who do not return to the bank at the end of the three year period will have to resign," he said.

The bank has also written to term-lending institutions and private sector banks to consider adoption of such a scheme. "We have received a very good response from banks and institutions as its a `win-win' situation for the parties involved. The Reserve Bank of India has also appreciated the scheme," Krishnamurthy said.

The bank has also identified 15 unviable branches in the rural sector which will be merged with other bank branches. The bank has 1,670 branches throughout the country.