Call this a New Year gift from the Banks Board Bureau (BBB) to public sector bank (PSB) employees. As part of the efforts to attract more professionals into the PSB space, the BBB will revamp the compensation package of employees and introduce bonuses, employee stock options (ESOPs) and performance-linked incentives from April 1 this year, its Chairman Vinod Rai said.
The BBB is also toying with the idea of ensuring a longer tenure for those appointed as executive directors and chief executive officers.
“If we provide, say, a six-year tenure, there is greater degree of compulsion of accountability that these officials will be subject to,” Rai said while delivering the 97th Assocham Foundation Day lecture in the capital on ‘Good governance is essential for sustained economic development’.
Rai said the compensation package of PSBs need to be improved in order to attract more professionals. “We may not be able to do much about the fixed component, but we can change the variable component.
“From the next financial year, we should be able to introduce bonuses, ESOPs and performance-linked packages. There will be both monetary and non-monetary incentives.”
Later, asked whether the improved package would be applicable only for senior management, Rai told that it will be available across all segments, including senior management and middle-rung executives.
On whether BBB was on track to fill up all vacancies at the helm of PSBs, Rai said the Bureau was doing the needful. “We are in the process of filling up vacancies. We are looking for the right people. We are trying to ensure that we choose the best and not the second best. Maybe there are one or two vacancies to be filled. But most of them have been done,” he said.
In his lecture, Rai said the need for greater probity, transparency and accountability in governance has gained added significance, going by India’s experience in the past two decades since the opening of the economy in the 1990s.
“While we have performed well in almost all sectors in the economy since liberalisation and we could withstand the global economic slowdown, we did fail to achieve the true potential of liberalisation reforms.”