This makes their remuneration almost at par with that of executive directors. The new pay scale structure, several top bank executives say, is against principles of natural justice.
The new pay scale for bank CGMs has been fixed at Rs 166350-183950 from Rs 103,000-113900 and this would be effective retrospectively from the date when they assumed charge in their respective banks, the Department of Financial Services said in a letter to chief executives of nationalised banks. This is in line with CGM pay scale in
, the DFS note said.
ET has reviewed the DFS letter, dated April 1, 2021.
Pay scale for executive directors has been Rs 176800-224000, which was last revised in December 2016.
Bank managing directors and EDs draw salary following the 7th national pay commission recommendation while CGMs’ salary hike followed the latest bipartite wage settlement like other bank employees.
However, as CGM positions in banks are created with board approval, the revision in their pay scale, allowances and other terms and conditions require government’s approval.
“At present the issue has created a lot of heat among top bank executives. Some more clarity is needed on the matter,” an executive director with a mid-sized bank said. “If the issue is not addressed, there may not be any incentive for people to apply for ED positions,” the person said. Several other senior executives with public sector banks corroborated his views.
“The anguish among bank executives is not surprising. Responsibility of an ED is much larger than a CGM and therefore, they should draw a much higher salary than CGMs,” a former bank chief executive said.
Banks were given the flexibility to create CGM level with separate pay structure in August 2019. Following this,
, , Punjab National Bank and Union Bank of India created the position in March 2020. Bank of India created the position in October last year.
Some of the banks such as erstwhile United Bank of India had created CGM post earlier but there was no pay scale benefit attached to that.