Amid pay cuts across the private sector, chairmen of public sector banks are all set to get performance-based bonuses for achieving their targets in 2008-09. The state-owned banks have already achieved their set targets fixed for this fiscal at a time when the global financial sector is going through tough times with big giants like Citibank and HSBC already resorting to rightsizing in order to save costs. That apart, private sector and foreign banks and financial institutions are unlikely to offer bonuses and incentives to their employees.
According to government sources, for all PSU banks, on the other hand, targets are on track. “Chairmen of PSU banks have met their targets and will get their bonuses and incentives, which are linked to their performance,” sources said.
MD Mallya, chairman and managing director, Banks of Baroda, told Hindustan Times that all public sector banks have adhered to the set goals, which includes meeting credit and deposit growth targets for the current fiscal. “All the state-owned banks have comfortably met their targets, which had been set in the beginning of the fiscal especially when the going has been tough worldwide,” he said.
The finer details of the details of the incentive package are yet to be worked out. Performances of PSU bank heads are assessed on the basis of targets set in the statements of intent given to the finance ministry in the beginning of the year.
Performances of CEOs are judged on the basis of their achievements of credit and deposit growth targets, quality of assets and recovery of non-performing assets. SK Goel, chairman and managing director, UCO Bank, echoed similar sentiments and said all state-owned banks have managed to achieve their targets.