Being the top banker of India's largest bank, State Bank of India (SBI) might be one of the most satisfying job in the country, but not the pay package, if Chairman Rajnish Kumar's comments are anything to go by. During the conference call with analysts, Rajnish Kumar was asked if the SBI would also follow its private peers in announcing pay cuts, to which the SBI chairman replied jokingly, saying "road pe aake rehna padega, pehle hi itni kam milti hai (I'll have to live on road, I already get so little)", reported CNBC TV18.
Though made lightly, the remarks reflect a huge difference in salary among top executives working in public and private banks.
As per SBI's annual financial annual report, Kumar received Rs 29,53,750 for FY19, while in comparison HDFC Bank CEO got Rs 55 crore as annual compensation for the year even though HDFC manages around one-third of assets as compared to SBI.
Several private lenders including Yes Bank, IDFC First Bank and Kotak Mahindra Bank have announced salary cuts for senior management from 10-30 per cent amid the coronavirus pandemic.
While top executives at private bank get high annual compensation, their counterparts in public banks get other perks like bungalows at prime locations. There have been efforts to address the pay gap between the top executives of public and private banks but the difference has only risen in recent years.
The SBI on Friday reported 492 per cent on-year rise in consolidated profit to Rs 18,176 crore in FY20. It reported a standalone profit of Rs 3,581 crore in the March quarter, as compared to Rs 838 crore in the corresponding quarter last year, driven by a one-time gain from the SBI Cards IPO proceeds. Stake sale in SBI Cards and Payment Services during the quarter raised Rs 2,731 crore. The SBI board will also meet on June 11 to consider raising funds in single or multiple tranches totalling up to $1.5 billion.
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