Salary Structure in the Indian Banking Sector- A Discussion Note


RBI governor gets an annual gross salary of little over Rs 15 lakh, deputy governors get around Rs 13 lakh per annum. In comparison, at least 14 top executives at various private sector banks got an annual remuneration of more than Rs 1 crore in the last fiscal ended March 31, 2010.

Many entry level positions at private banks yield higher pay than SBI chairman who controls a fourth of the industry. So there is no doubt that The compensation gap is huge between public sector & other banks.



Speaking at a Conference recently, Dr. D. Subbarao, Governor, Reserve Bank of India warned that India’s public-sector banks, which make up about 70 per cent of the entire industry, risked losing competitiveness and talent if they refused to increase wages. If public sector banks are required to compete with private banks on a level playing field, there is a good case for compensating them too on a competitive base.

According to Mr Anurag Khanna, CMD, Banknet Group, it is a common knowledge that over the years, public sector banks especially State Bank of India are losing large number of talented executives to the private & foreign sector banks. Maybe a way-out can be to add a substantial performance bonus component in the public sector bank salaries.

So the dilemma for Central Bank is to further regulate public sector bank compensation or make their salaries competitive & higher.

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