Echoes RBI's comment that PSBs might lose talent to private sector lenders behind poor compensation packages.
Within days of the Reserve Bank of India (RBI) making a strong case for higher salaries for public sector bankers, State Bank of India (SBI, BSE:500112) chairman O.P Bhatt said the compensation package for state-owned lenders needs to rise.
Expressing concern over the low salary structure in public sector banks (PSB), RBI governor D. Subbarao had said that due to poor compensation packages, PSBs would lose talent to private sector lenders.
Public sector banks account for nearly 70 per cent of the country's banking sector where compensation is determined by the government. As regards the private and foreign banks, the compensation packages are approved by the central bank.
"The executive compensation in the public sector, as is well known, is lower than that in the private sector...If PSBs are required to compete with private sector banks on a level playing field, there is a good case for compensating them too on a competitive base," Subbarao had said.
On attrition at SBI, Bhatt said the bank has 200,000 employees and there are around 8,000 retirements a year and if one looks at the numbers, this is less than five per cent.
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