There is a growing debate between the pay packages of top executives in public sector banks – PSBs and private sector banks. It was reported recently that the Chairman of the State Bank of India – SBI Mr. Dinesh Khara had taken a yearly salary of Rs 37 lakhs in FY 2023. As of March 2023, Khara has the responsibility of managing Rs 55.17 lakh crore of assets for the biggest public sector bank in India.
His annual compensation, which includes his basic pay and dearness allowance has been increased by around 7.5% compared to the previous year. However, one cannot still compare it with that of his private bank peers.
As a matter of comparison, HDFC Bank CEO Sashidhar Jagdishan took home an annual salary of Rs 6.51 crore in FY22. However, he manages a balance sheet of less than half of SBI. As of now the FY23 numbers are not yet released, but even if you compare SBI Chairman’s salary with HDFC Bank CEO’s salary, you will understand that Khara got some 18 times less salary compared to Jagdishan. The salary figures of other private banks on an overall level are also quite high if compared with the Chief of SBI and other PSB chiefs.
The report when surfaced about Khara’s salary on social media created quite a huge stir. While some people thought that Khara’s salary is very less compared to the kind of work that he is doing in the largest bank of India, others felt that there are other perks also involved for public sector bank employees that private sector bank employees don’t enjoy such as a plush bungalow in Mumbai, dedicated help, two cars with drivers, unlimited petrol, among others. However, these perks don’t justify the amount of salary that private sector bank employees actually enjoy and live in a dignified as well as luxurious manner.
The humble compensation packages of government-owned and operated banks’ employees and officers have always been debated for a long time. It is a fact that public sector bank employees get relatively low pay as compared to private sector bank peers.
This is not the first time that such pay packages have been compared between the government and private sector. In the past also, companies in the government sector have always underpaid their employees under the pretext of giving job security, which the private sector doesn’t provide for ages.
I believe that the pay scale in the public or government sector allows for a decent living with basic needs from the start of employment till retirement and doesn’t allow for any luxurious or high level of living standards. Whereas in the private sector, the jobs are always offered in a lucrative manner so that it can attract the top talent, get the work done, and even terminate the contracts or jobs when the employee pool is not required.
This root-level understanding of why public sector jobs are most preferred by people in the olden times and even people now from the old school of thinking is what sets them apart.