Bank of Cyprus (BoC) put a voluntary retirement scheme into force Monday, in a bid to shed around 1,000 jobs.
The scheme, which has been rejected by the union of bank employees, will be valid until July 26.
It provides that those who opt out would receive a month’s salary for every two years of service, plus five monthly salaries.
Compensation would be up to €150,000 for each person leaving, the bank said, and employees would keep their medical and life insurance coverage until the end of 2014.
The employee union, ETYK, has said that he plan was doomed to fail.
One of the problems is the workers’ provident fund.
The union argued that there remained a lack of clarity over how much an employee opting for the voluntary retirement scheme would get from their provident fund.
The lender said the scheme was generous and urged staff to take advantage or face being made redundant later on under worse conditions.
BoC, owned by its biggest clients after their uninsured deposits were seized and converted to equity to help its recapitalisation, said the scheme would be open to all staff, including those at subsidiaries.
Its staff numbers swelled to about 5,600 after it took on 2,400 from now-defunct Laiki Bank, the island’s second- largest lender which was forced to wind down after being hit by exposure to Greek debt.
Under terms of an international aid package, depositors in BoC saw their accounts raided in a process known as a bail-in.
The state also received €10 billion in aid from the EU and the International Monetary Fund.
Provident funds were not exempted, although the government said it would try to reduce the losses.