RBI defers move to cap private bank salaries
24 Feb 2011
The Reserve Bank of India has deferred the implementation of guidelines on compensation for full-time directors and other executives of private and foreign banks operating in India by a year to 2012-13, it said today.
The guidelines were due to be implemented in 2011-12, but the central bank said the move was deferred to give banks sufficient time to frame their policies.
In July 2010, the RBI issued draft guidelines on compensation for whole time directors, chief executive officers, risk-takers and control function staff of private sector and foreign banks in India. It said it was examining comments received.
It has asked banks to refer to the Basel Committee on Banking Supervision's (BCBS) document on methodologies for risk and performance alignment of remuneration, which was issued in October, and start preparatory work for formulating compensation policies, according to a statement issued in Mumbai.
The RBI had decided to find ways to regulate the salaries of chief executives and other top officials in private and foreign banks since their hefty compensation packages came under the scanner in the wake of the global financial meltdown of 2008-09.
The RBI had released draft guidelines for private sector banks and foreign banks with regard to a sound compensation policy in July, in line with steps taken by the global community and initiatives by G-20 nations.
