The Reserve Bank of India (RBI) is planning to frame a set of rules that would link remuneration of banks’ CEOs to certain parameters such as balance sheet of the bank, delinquency of loans, governance record and profits.
The proposed framework is likely to offer a wide template to the board of directors of the lenders while giving nod to increase in salary, performance bonus and stock options provided to the senior most executive.
The guidelines issued by the regulatory as of now is a general directive on the remuneration of senior officials in functions ‘business’, ‘control’ and ‘risk’.
The new framework will specifically consider CEO compensation in banks.
The current remuneration of bank CEOs is also cleared by the RBI and the regulator still has the authority to halt a portion of the salary in consideration of non-performance or governance lapses.