The Hindu Business Line : Bank chiefs want flexibility in fixing wages

Mumbai, Nov. 27 Public sector banks need to move away from industry-level wage negotiation, said Dr A.K. Khandelwal, Chairman and Managing Director, Bank of Baroda.

“We need to dismantle the existing structure. There is no law that restricts us to determine compensation packages at the bank level but we need to persuade the government to permit it,” he said.

He was speaking at a panel discussion of the chief executives of public, private and foreign banks at BANCON 2007 here on Tuesday.

“We cannot have a standardised approach for measurement of performance,” he added.

Other public sector bank officials also concurred with the view.

Mr T.S. Bhattacharya, Managing Director, State Bank of India, said that Government rules were restricting the incentives that could be provided to employees.

Elaborating on the disparity in pay-structure, Mr M.B.N. Rao, Chairman and Managing Director, Canara Bank, said the employee at a foreign branch of a public sector bank may be earning higher remuneration than the Chairman himself. There has to be a change in the policy at the level of the bank as well as the highest decision makers, he said.

“We have a totally redundant system. To attract the right talent to my treasury department for instance, I need to pay more,” said Mr M.V. Nair, Chairman and Managing Director, Union Bank. He also felt that unions may not be a stumbling block for restructuring packages based on performance.

Age factor

Another issue that came up in the panel discussion, was the ‘age factor’. Mr Haseeb A. Drabu, Chairman and CEO, The Jammu and Kashmir Bank, said that the age-wise distribution of public sector employees showed that it was on a higher side. “This is a structural constraint and the private sector has an advantage here.”

Voicing the views of foreign banks, Mr Neeraj Swaroop, CEO, Standard Chartered Bank, said that the emphasis should be on attracting people from diverse backgrounds.