The world of finance in India is a study in contrast. The gulf between private and public sector banks has been widening on various parameters — growth, bad loans, profi tability, service standards, product innovation and many more. Governmental interference and poor quality of personnel are cited as reasons for state-owned banks to be laggards. But is it that simple? The arrest of Syndicate Bank chairman SK Jain has brought to fore problems at public sector banks. The most glaring difference between the two banking segments is in the compensation and incentive structure. Private sector bankers are paid astronomical sums, which they justify on grounds of profitability — performance determines pay.

Read the Economic Times news report here.