The man who signs on the country's currency notes takes home a measly Rs 2.87 lakh per month. Yes, this is the gross emoluments of RBI Governor Shaktikanta Das, which includes dearness allowance (DA) and other payments.
The difference between the gross salary of a Governor and a Deputy Governor is also not much. The Governor earns just Rs 31,500 more than a Deputy Governor per month. There are four Deputy Governors (a successor of Viral Acharya has not been appointed yet). They earn Rs 2.55 lakh per month.
The monthly emolument details were released by the RBI on December 31, 2019. The gross salary details are for June 30, 2019.
Surprisingly, the last big salary revision took place almost three years ago when Urjit Patel was at the helm of affairs. Patel's basic salary was increased to Rs 2.5 lakh with retrospective effect from January 1, 2016. The current Governor Das also draws the same basic salary of Rs 2.50 lakh per month as per the RBI data for June 30, 2019.
Clearly, there has been no change in the salary of RBI Governor over the last three years. Ditto for Deputy Governors, whose basic salary was last tinkered with three years ago to Rs 2.25 lakh with a retrospective effect from January 1, 2019.
There is no comparison of the gross salary of a RBI Governor or a Deputy Governor with their regulated entities such as banks, especially private and foreign banks. Take for instance, the MD and CEO of the largest private bank, HDFC Bank, gets a gross emolument of close to Rs 90 lakh per month (without ESOPs and incentives) as against Governor's Rs 2.87 lakh per month. The salaries of CEOs and chairmen of public sector banks (PSBs) are akin to what the senior management of the RBI gets. The chairman of the SBI earns around Rs 2.46 lakh per month.
The gross salary linkages show the salary of a private bank CEO (without ESOPs and incentives) is over 31 times the gross salary of a RBI Governor. A global comparison of a base salary of a bank CEO and the Federal Reserve Bank Chairman shows a difference of just 10 times. The US Fed Chairman gets an annual salary of $203,250 (Rs 1.46 crore) whereas the base salary of a Bank of America CEO is $1.5 million (Rs 10.8 crore)
The celebrated economist Raghuram Rajan, who assumed the governorship in September 2013, used to get a monthly salary of Rs 1.69 lakh. In fact, when he left, Rajan's monthly salary was around Rs 2 lakh. The only perk worth mentioning is his South Mumbai-based colonial bungalow on the Carmicheal Road. SBI Chairman also has a Malabar Hill bungalow which is a cynosure of all eyes. An interviewer once advised the former SBI Chairman OP Bhatt to not let his new employer see his pay cheque when he would negotiate for his post retirement job. Pat came the reply: "But I can let him see my house."
Jokes apart, these top jobs involve power, status, responsibility, exposure, national pride and international recognition. Take for instance, the RBI Governor's role covers a whole gamut of areas such as framing regulations, supervision of banks and non banks, managing and helping government in raising debt, currency management, payments and settlement, foreign exchange management and also monetary policy management. The RBI also looks at the financial stability of the system. It is the most important function of the central bank. It may be remembered that how the instability of the financial system in the US and the Europe post the Lehman Brothers crisis had impacted the entire world post 2008. The economies globally are yet to recover from that financial market shock.
The former RBI Governor Rajan had actually mooted the idea of upgrading the Governor's rank from the current cabinet secretary level. Rajan had suggested that the ranking of the Governor should be commensurate with the role. "There is a reason why central bank governors sit at the table along with the finance ministers in G-20 meetings," said Rajan.