‘RBI draft on pvt bank CEOs’ package soon’

RBI is likely to announce draft guidelines on compensation packages of pvt sector bank chiefs.

The Reserve Bank of India is likely to announce draft guidelines on the compensation packages of the private sector bank chiefs by next month,a move aimed at aligning the salary structures with business performance.

“The indications are that the draft paper will be out by March. This would be aimed at putting a framework in the way banks compensate their CEOs and other top executives,” a source in the know said.

In mid-term policy review,Reserve Bank Governor D Subbarao had said that the apex bank was working on the principles outlined in the Financial Stability Board for sound compensation and will come out with norms to ensure healthy practices in compensation policies of private and foreign banks.

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The Governor had highlighted compensation practices,especially those of bigger financial institutions,as one of the factors that contributed to the recent global financial crisis.

In the G-20 meet last year,the world leaders expressed concerns over the high compensation packages of top bank executives,which,they argued was a not positive sign in a healthy financial system.

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Reserve Bank of India

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