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‘Is the 94.1 LPA salary in Bengaluru too low for a 32-year-old software engineer?’ read one of the top questions on the social question-and-answer website Quora. While Indian netizens were split over this issue, the chiefs of the country’s biggest banks are likely to have frowned. The reason? In FY23, a public-sector bank chief took home a salary of ₹37.7 lakh a year on average.
This is based on businessline’s analysis of the annual reports of 11 of the country’s 12 PSBs, including State Bank of India, Punjab National Bank, and Bank of Baroda. Union Bank of India has not released its report for FY23.
The Managing Director and CEO of Punjab National Bank took home the most, ₹48.34 lakh, while the MD and CEO of Indian Overseas Bank bagged ₹48.09 lakh. In the case of IOB, the salary was 38.55 per cent more than what was drawn in FY22. This is partly due to the fact that the bank had two chiefs in FY23 and the figure for the year is the sum of both their salaries. The one who retired received his leave encashments and gratuity, which stepped up the total.
The Bank of Maharashtra MD and CEO received a 41 per cent hike compared to FY22 and took home ₹47.80 lakh. A performance-linked incentive of ₹10.72 lakh was partly responsible for this.
The chairman of State Bank of India received ₹37 lakh in FY23, 7.8 per cent more than his pay in FY22, which led to a hue and cry recently. This is because the pay package of PSB chiefs is often compared with that of peers in private banks.
Most big private banks in the country have not released their FY23 reports yet. However, businessline analysed their FY22 reports to understand the difference. In FY22, the CEO of HDFC Bank drew an annual salary of ₹6.5 crore. The chiefs of Axis Bank and IndusInd Bank drew ₹7.95 crore and ₹7.5 crore, respectively. The exception was Kotak Mahindra Bank, whose chairman, Uday Kotak, did not draw a salary in FY22.
The relatively modest pay of PSB chiefs isn’t anything new. In 2016, former Reserve Bank of India governor Raghuram Rajan pointed out how the salaries of PSB chiefs fell short compared with global standards. “One of the problems, of course, is that the public sector overpays at the bottom but underpays at the top. I also feel underpaid,” he had famously said.
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