Processing .....please wait.. 
The article has been forwarded.... 
RBI to issue guidelines on CEO compensation package by Dec
Wednesday, 03 November 2010, 18:03 IST
New Delhi: By the end of this year the Reserve Bank will decide ways to regulate salary of CEOs and other top officials in private and foreign banks, since hefty compensation was one of the factors in the global financial meltdown.
"It is proposed to issue final guidelines on compensation practices by end-December 2010," RBI said in its second quarterly monetary policy.
The hefty compensation for top bosses for global financial institutions, designed on the basis of their risk taking ability was also considered as responsible for the 2008 global crisis.
RBI said the draft guidelines for private sector banks and foreign banks with regard to sound compensation policy were announced in July 2010, in line with the steps taken by the global community and the initiatives taken by G-20 nations.
RBI had proposed to limit annual salary increases of CEOs or wholetime directors of private banks to 10-15 per cent, besides a provision for slashing their remuneration in case of poor financial showing, in its draft guideline.
The central bank had said that guaranteed bonuses were not consistent with sound risk managements or productivity- linked principles and proposed that they should not be a part of the compensation plan. Bonus should only be given for hiring new staff and be limited only to the first year, the draft had said.
As a matter of fact, the country's largest private sector bank ICICI's chief Chanda Kochhar got a remuneration of 
1.73 crore in 2009-10, as against market leader and state-run lender SBI chief O P Bhatt's 26.51 lakh.
The number of top executives at private sector banks getting remuneration in excess of Rs one crore a year is more than that of their counterparts in any other sector, according to data available for fiscal year 2009-10.
As per the latest data, about 25 private sector bank top executives, including chiefs of ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank and DCB, figured among the 200-odd such persons during the year ended March 2010.
While the government fixes the salaries for public sector bank chiefs, private banks need a clearance from RBI for remuneration of their top executives, but currently there is no cap.
Source: PTI
1.73 crore in 2009-10, as against market leader and state-run lender SBI chief O P Bhatt's 26.51 lakh.
The number of top executives at private sector banks getting remuneration in excess of Rs one crore a year is more than that of their counterparts in any other sector, according to data available for fiscal year 2009-10.
As per the latest data, about 25 private sector bank top executives, including chiefs of ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank and DCB, figured among the 200-odd such persons during the year ended March 2010.
While the government fixes the salaries for public sector bank chiefs, private banks need a clearance from RBI for remuneration of their top executives, but currently there is no cap.
Source: PTI