Rajan Suggests Higher Pay For Top ranked Bank Officers

When thinking is defective, action will also be negative and disastrous.  Rajan is talented but I disagree with him that PSU bank staff are overpaid at bottom and underpaid at top.

Four decades ago , people and government used to say that since teachers are low paid  , teaching in government Schools is inadequate and weak. They raised the salary of government teachers in schools and colleges in eighties but quality of teaching instead of improving , has deteriorated.

Private schools are paying very less to teaching staff but quality of teaching is better there in comparison to government schools.

Similarly private banks are flourishing year after year .They give value to good performers but management of government bank give value to flatterers and bribe earners only. Bank staff in PSU banks work for pleasure of their bosses and politicians whereas bank staff in private banks work for their organization. This is the difference.

I therefore feel that Rajan ,RBI Governor is not right in saying that health of banks will improve by raising salary of top officials. Rather it is true that salary of top officials have been raised at higher rate during last three settlements compared to bottom staff. Even then health of banks have deteriorated at greater rate during last one decade  than in preceding decades.


Copy of news published in Times of India today is as follows.

The governor  called for levelling huge imbalances in payscale of public sector bankers saying that their top management should be paid higher instead of the present state of overpaying the bottom and underpaying the top which makes it difficult for them to attract talent at the higher level, specially through lateral hiring.




"One of the problems, of course, is that as with all public sector entities, you overpay at the bottom, and underpay at the top. Compensatory, the difference is that, yes, you feel that you are doing the job for the broader public but you just make it harder to attract top talent, specially a lateral entry," Rajan said.

In a strong pitch for phasing out the government role in top-level appointments at public sector banks, RBI governor Raghuram Rajan on Tuesday suggested empowering their boards to take all major governance decisions freely without having multiple "constituencies to satisfy".


Suggesting a major reduction in government and regulatory oversight of public sector banks (PSBs), including by RBI itself, the outgoing governor also proposed withdrawing the central bank nominees from their boards.