Govt revises performance-linked incentive scheme for directors, senior executives of PSBs

The govt has introduced a revised PLI scheme for senior executives of PSBs, including return on assets & NPA levels among parameters

Govt revises performance-linked incentive scheme for directors, senior executives of PSBsPSU Watch

Published on:

20 Nov 2024, 3:20 pm

New Delhi: The government has introduced a revised performance-linked incentive scheme for senior executives of public sector banks (PSBs), including return on assets and NPA levels among parameters. The eligibility of banks for the scheme will be assessed by a government-appointed committee on the basis of four parameters, including that Return on Assets (RoA) should be positive and lower net non-performing assets (NPA).

PSU Watch is now on Whatsapp Channels. Click here to join

In a circular, the finance ministry said the scheme, which aims to provide to suitably reward and motivate employees for significant value creation for various stakeholders, will be effective from financial year 2023-24.

The committee, headed by Department of Financial Services (DFS) Secretary, will have Additional Secretary (DFS), Joint Secretary (Banking) and Chief Executive of Indian Banks' Association (IBA) as members.

According to the communication, the panel shall assess the governance mechanism in the banks for the PLI evaluation period with respect to occurrences of any major/ serious cases of violations, malpractices or those severely impacting bank credibility and reputation.

"The committee shall after assessment, list out the banks which shall be eligible to be considered under the PLI scheme. The committee may also decide on (in) eligibility of officer(s) for PLI scheme," it said.

PSBs show robust performance in H1, business grows 11%: Finance Ministry

As per the circular, PLI for EDs and MDs of nationalised banks and DMDs, MDs and chairman of SBI could be up to 100 per cent of annual basic pay.

It also specifies 4 criteria, including positive RoA, for banks to be eligible to operate the PLI scheme. Banks will have to meet at least three of the 4 criteria. The circular revises the August 2018 norms related to PLI.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)