News: Year-end bonuses of the heads of leading private banks delayed

Compensation & Benefits

Year-end bonuses of the heads of leading private banks delayed

Pertaining to growing governance issues and reported frauds, Chief executive officers at HDFC, ICICI Bank and Axis Bank Ltd. are yet to receive bonuses for the financial year ended March 31, 2017
Year-end bonuses of the heads of leading private banks delayed

As the Reserve Bank of India questions the size of the payouts citing the lenders’ performance issues, the year-end bonuses for the heads of leading private banks get delayed. 

Reportedly, ICICI’s board had approved a bonus of Rs 2.2 crore for CEO Chanda Kochhar, Axis Bank’s Shikha Sharma was set to receive Rs 1.35 crore and HDFC Bank’s Aditya Puri was to get about Rs 2.9 crore. But RBI hasn’t signed off on the proposed payments of banks yet. 

Earlier, ICICI Bank had dismissed all the allegations against Chanda Kochhar and declared that the board has full confidence and rests complete faith in her. Last year, according to Lenders’ Annual report, she had topped the list of bankers in India’s big private sector bank by receiving a total remuneration of Rs.7.8 crores in FY17 and now amid allegations, her performance bonus remains on hold. 

The RBI ideally should have approved the bonuses well before March 31, 2018, but hidden bad loans and serious governance issues have slowed down the process. 

Not only ICICI but other banks are also under the radar with alleged lapses in corporate governance. 

“Private Banks will likely report a sharp rise in slippages, led by ICICI Bank and Axis Bank,” said analysts led by M.B. Mahesh at Kotak Institutional Equities, referring to higher delinquent loans. They predict January-March 2018 results would confirm a quarter of “pain” for Indian lenders 

An RBI audit showed Axis hadn’t disclosed bad loans worth about 56 billion rupees for the year ended March 2017. HDFC Bank also reported a divergence and ICICI said it isn’t required to make disclosures on the topic even as provisions for bad loans climbed. 

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Topics: Compensation & Benefits

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