Cut bank CEOs' pay for poor show: RBI

Cut bank CEOs' pay for poor show: RBI

There are 1 comment on the Rediff.com story from Jul 2, 2010, titled Cut bank CEOs' pay for poor show: RBI. In it, Rediff.com reports that:

A iming to discipline the financial sector, the Reserve Bank of India on Friday proposed slashing salaries of chief executive officers and directors of private banks on poor showing and limiting increases to 15 per cent.

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SANJAY PRABHU

Mumbai, India

#1 Jul 8, 2010
Axis Bank is another such bank where in the MD takes 3 crores salary plus 100000 ESOP, DMD takes 2 lacs ESOPs per year, where as the other hard working branch employees upto the level of AVP does not get any ESOPs, although they are the real gems and pillars of the bank who contribute to the business of the bank. Other cream of Top management consisting of 2% of the employees in the grade of VP, SVP, Presidents enjoys annual ESOPS between 12000 to 40000 ESOPS every year. This shows the greed and unethical conduct of the top management in looting the investors money. Company Law Board should do necessary amendment in Company Law and should give the ownership rights to each and every employee of the organisation and there should not be a large gaps as seen in Axis Bank while distributing the ESOPs between the lower grade and the highest grade employee.
Some people say that they are Out of Box Thinkers and hence they are eligible for higher remuneration – Out of Box Thinking is nothing but putting pressure on mid and lower level employees in order to achieve the budgets and force them to mis-sell the Insurance, MF, Forex Derivative and other bank products to customers and then force branch employees to get involved into various frauds arising out of mis-selling. Yes this is called Out of Box Thinking of the top management.
Is there any Accountability concept in Private Sector Bank ? No
Is the Whistle Blower policy implemented in its True Spirit ? No
Is the CEO responsible for the frauds & collapse of the financial institutions? No
If yes then why the RBI, SEBI & ED has not taken any action on the banks promoters and CEOs like GTB, CBL, BoR ( including finance companies like Lloyds Finance ) which has collapsed and later merged with nationalized banks. Do our regulatory authority had been protecting the Investors Interest or the CEO’s interest? How serious is there Audit procedure?
There have been serious frauds happening in Govt Accounts such as JNNURM, Municipal Corporation Accounts, Central Excise, Agri Credit at Rajkot, Lucknow, Forex Frauds in Kolkatta and Mumbai which has been happening for last 3 years and the bank auditors could not unearth the frauds. SEBI, RBI, Enforcement Directorate & Economic Offence Wing should investigate in to the matter and fix accountability on the Top Officials of Axis Bank. Even some officials at Vice President level have used the public money for paying the fees of his children’s personal benefits, by debiting the suspense account and the auditors have failed to investigate in to the matter, as the auditor himself was involved in various frauds in the bank.
If this practices continues, you will see similar situations in next 3 years, and the RBI will have to merge this white private sector elephants with nationalized bank and hence we should control the Salary of CEO and implement strict vigilance and staff Accountability in private sector banks.
I suggest all of you to read " If god was a Banker " by Ravi subramaniam and my experience with Private Sector Bank is a similar story, its all about looting the public money for the fun and enjoyment of Top Officials.
Recently the European Parliament approved the world’s toughest curbs on unsound remuneration practices in banks as an efforts to limit risk in a sector shored up by taxpayers and the Indian government too has seen the financial scams earlier and we look forward to Regulatory Authority in implementing the accountability concept in Private Sector Bank.
Ex Employee & Shareholder of Axis Bank

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