Millennium Post

PSU bankers’ pay simply too poor, observes Arundhati

Bankers are paid poorly in India as compared to their counterparts elsewhere in the world, she said. “Let me start with income of banking professionals in India. Here, 70 per cent of the banks are in public sector and they are paid very very poorly compared to market,” she said at Delhi Economic Conclave here. The SBI chief said there is urgent need to improve quality of board members by providing them suitable renumeration so that the overall efficiency improves.

“We are very blessed in that. SBI has invariably had very good quality board. But that may not be true across (other banks’) board. One of the reasons is very low renumeration that is given to the board directors,” she said. “If you are trying to attract best in the field, they have to be remunerated accordingly. We must insist on people who are coming into the board having sufficient hands on experience in both planning and execution in their respective areas,” she said.

So, this is something that government can easily implemented and should be done, she added. The comments come about a week after PSU bank employee unions went to a four-day relay strike to press for early revision of wages.

With regard to governance, she said P J Nayak Committee has very clearly laid out certain roadmap as to how governance can be taken forward. “I believe the government is looking at it. While they do look at it, I believe there are very some low-hanging fruits and those could be easily implemented within a short period of time,” she added.

‘Govt should Let PSBs issue equity with differential voting rights’

With the government indicating that it won't continue to fund public sector banks (PSBs), SBI chairperson Arundhati Bhattacharya on Thursday said they could look at issuing shares with differential voting rights to raise funds to meet the Basel-III capital adequacy norms.

"The writing on the wall is very clear...they (PSBs) have to think of differential voting rights. It is time to lay out some kind of road map on how much the banks need to do and how much support it would get," she said while talking to reporters on the sidelines of a conference. The government on Wednesday allowed PSBs to raise up to Rs 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases so as to meet Basel III norms.

Pitching for consolidation in the banking sector, Bhattacharya said that it was important to have three-four major banks. "It is extremely important for India to have 3-4 major banks. ... We should allow the banks to come together and talk among themselves. In the past also we have seen government has forced some is very important for the banks to determine who should be their correct partners," she added. According to Bhattacharya, "it is better to merge good banks with good banks." She further said the government has shown its intent to continue with reforms in the banking sector by deciding to bring down its stake to 52 per cent.

"The news that the government has allowed PSBs to bring down government stake to 52 per cent kicks off the next round of reforms... because for the first time clear signal has been given (to PSBs) to source capital from the market.”
Next Story
Share it