RBI norms on bank execs' salary on cards

The Reserve Bank of India is set to unveil broad guidelines to regulate the pay of senior executives of private and foreign banks,in step with other regulators in the West where banks have come under fire for their generous compensation packages to staffers.

Compensation practices have come into sharp focus, especially in the West, in the aftermath of the financial crisis. The RBI has said that the principles of Financial Stability Board (FSB), a global watchdog comprising senior representatives of national financial authorities, which have been endorsed by the G-20, should be the guiding tenets for devising compensation schemes for all employees in a financial institution.

According to senior bank officials, RBI is likely to come out with broad norms on compensation policies and is unlikely to limit pay. However, there is likelihood that bonus payments may be deferred. For instance, in respect of ING Vysya Bank, the RBI did not approve the pay package of Gautam Vir, former CEO of Development Credit Bank. Mr Vir finally did not join ING Vysya Bank.