Even as credit growth is muted, indicative of the pandemic weighing on aggregate demand, the share of public sector banks in total advances and deposits has been declining since 2010-11. By contrast, private-sector banks have garnered a larger slice of business, showed the Reserve Bank of India’s (RBI) analysis in its latest Report on Trend and Progress in Banking. This could be attributed to a greater proportion of retail loan in total advances.
But the pay of a public sector bank CEO was just about three times the average for the bank. In some private banks, it was as high as 67 times the average bank employees’ salary.
“The compensation paid to a bank Chief Executive Officer (CEO) in comparison to a representative bank employee varies greatly across different bank groups,” the RBI report noted. For public sector banks, on an average, CEOs earn three times the typical employee, while the same was as high as 75 times in the case of small finance banks and 67 times in the case of private sector banks. The corresponding multiple was low for foreign banks as the remuneration received by employees is relatively high. “The variation across bank groups remained consistent through 2018-19 and 2019-20,” RBI said.
The revised guidelines on compensation require that the compensation of CEOs / Whole Time Directors / Material Risk Takers must be adjusted for all types of risk, their outcomes and time horizons. The report also notes that the two bank groups have relied on diverse sources of funding loan demand.
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
