The State Bank of India, India's largest commercial bank, is working on a performance-related, variable pay structure for its employees.
Bank of Baroda is planning to increase the number of general managers in the bank and redefine their roles.
These are the first moves being made by the public sector giants soon after the finance minister announced a managerial autonomy package for government-owned banks.
SBI has internally worked out the details of a performance-related, variable payscale for its officers. A senior SBI executive confirmed the move. It may soon place the matter before its board for approval.
A radical market-related pay package at SBI will force other public sector banks also to follow suit. Currently SBI executives (except fresh management recruits) get a fixed salary, with a chief general manager earning a gross salary of Rs 30,000-35,000.
Once the new package is in place, this will go up substantially and part of the salary will be linked to performance.
One outcome of this is that the Indian Banks' Association-brokered industry-wide wage pact may become redundant as most banks are likely to follow the SBI example.
"The IBA package may form the base and most of the banks will try to improve on it," said a banker.
BoB plans to increase the number of general managers from 22 to 28 and recast the positions as strategic heads of businesses. The general managers will now focus on business development rather than look at operational aspects.
The attempt was to decentralise power and empower people down the line so as to speed up the decision making process.
"Currently there is a disaggregated system in which some general managers head different zones in the country while others head businesses. Each one will now head a business," said a bank executive.
There will be separate general managers as heads of all businesses, including personal finance, business finance, corporate finance, infrastructure and HR, among other things.
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