The finance ministry is considering a proposal by Indian Bank's Association to give post allowance to chairmen and executive directors of public sector banks, a key official said on Tuesday.
"We are considering the proposal mooted by IBA," K B L Mathur, economic advisor (banking) in the Union finance ministry, told PTI.
He, however, refused to specify timeframe by when the ministry would take a decision on post allowance to chairmen and EDs of PSU banks.
PSU bank bosses may take home much more
Post allowance is over and above what the chairmen and EDs get as basic salary, dearness allowance and other perquisites.
IBA chief executive H N Sinor also said Finance Minister P Chidambram had told bankers at the recent meet in New Delhi that the ministry was giving due weightage to the proposal.
The proposal calls for giving up to Rs 50,000 to a chairman and Rs 40,000 to an executive director of PSU banks as post allowance.
This is one of several proposals that IBA had sent to the ministry to reduce the growing gap between top officials of PSU banks and their counterparts in private banks.
"We have sent 3-4 proposals and pursued the matter for about two-and-a-half years," Sinor said.
IBA is no longer hopeful that its proposals, except the one about post allowance, would be accepted by the ministry, he said.
The association has argued that salaries of top officials of PSU banks could not be equated with secretaries in the Union Government since bureaucrats do not run the risks of business.
The salaries of the CEOs of State Bank of India, Industrial Development Bank of India, Nabard and a deputy governor of the Reserve Bank of India are now linked to the salary of a secretary in the Union government.
The salaries of other PSU banks' chairmen are linked to that of a special secretary, while an EDs salary is linked to a joint secretary.
Sinor said a PSU bank's chairman draws up to Rs 39,000 as basic salary in a month, while an ED's basic salary is up to Rs 34,000 per month. Both get DA and other allowances above the basic salary.
There is also a ceiling and once these officials hit the upper limit, they are not entitled to annual increment of Rs 500 any more.
Some senior general managers of PSU banks are reported to be earning higher salary than EDs.
