1 min read.Updated: 15 Jun 2015, 06:55 PM ISTRemya Nair
Matching salaries earned by private sector bankers may turn out to be a hurdle for the government
New Delhi: The government on Monday started interviewing candidates both from the public and private sector to head five state-run banks, but questions remain over how the new hiring experiment will play out.
On offer: Flexible pay packages to lure private sector talent, reduction in upper age limit from 57 to 55 years and in board-level experience from three years to one year.
As many as 26 candidates from both private and public sectors will be interviewed by three sub-committees on 15 and 16 June, news agency Press Trust of India reported.
The government is making a second attempt to fill the posts of managing director and chief executive officer (MD and CEO) at Punjab National Bank, Canara Bank, Bank of Baroda, Bank of India and IDBI Bank, after a previous effort in February did not attract enough applications from the private sector.
However, matching salaries earned by private sector bankers may turn out to be a hurdle.
Most professionals at the MD and CEO level in leading private sector banks in the country earn over ₹ 4 crore. Chanda Kochhar, MD and CEO of ICICI Bank Ltd has an annual remuneration of ₹ 5.85 crore, including performance bonus but excluding stock options, as per the bank’s annual report for 2014-15.
HDFC Bank MD Aditya Puri gets an annual remuneration of ₹ 6.06 crore, including performance bonus and contribution to provident fund and superannuation but excluding stock options, as per the bank’s annual report for 2013-14.
Rana Kapoor, MD and CEO of YES Bank gets an annual remuneration of ₹ 4.69 crore, excluding stock options as per the bank’s 2014-15 annual report.
Shikha Sharma, MD and CEO of Axis Bank get an annual salary of ₹ 3.18 crore, excluding variable performance bonus from 1 June 2014, the bank’s annual report said.
In comparison, heads of state-run banks earn much less, in the range of ₹ 20-25 lakh a year. Arundhati Bhattacharya, the chairperson of India’s largest bank State Bank of India, draws an annual salary of around ₹ 25 lakh.
Even executive directors in most private banks earn more than ₹ 2 crore in annual remuneration, excluding stock options.
Will the central government be able to match such remuneration? How will serving chiefs of state-run banks react to such difference in pay? What will the government do to address the disparity? The questions remain.
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