“It is in such cases, we send it back to bank boards and ask them to re-look it and then come to us,” he explained, while referring to the central bank’s circular on private sector bank executives’ compensation.
Das was addressing questions at the Business Standard BFSI Summit.
The central bank’s circular is only a principle-based regulation, the governor said. It doesn’t define how much fixed and variable pay should be there for these private sector bank executives, but just the ratio.
“It is the NRC of the banks, which is expected to decide the compensation… We don’t put any restrictions,” he said.
In terms of attrition at some private sector banks, the governor said that the RBI is looking at it as a part of its supervisory role.
“RBI has always looked at it, but now we are looking at it more closely as times have changed… Banks need to focus on it.”
On corporate governance, he said that the Indian banking sector and non-bank financial companies are healthy and robust.
Even the banks’ exposure to non-bank financial companies is also monitored regularly by the RBI, Das said.