Revamped Incentive Scheme Spurs Public Sector Banks

The government has updated the performance-linked incentive scheme for senior executives of public sector banks, focusing on parameters like return on assets and non-performing asset levels. Eligibility will be assessed by a government-appointed committee based on four criteria, aiming to reward significant value creation for stakeholders.

The government has introduced a revised performance-linked incentive (PLI) scheme for the senior executives of public sector banks, emphasizing financial metrics such as return on assets and non-performing asset (NPA) levels.

The scheme's eligibility criteria will be assessed by a committee comprising finance ministry officials and members from the Indian Banks' Association, effective from the financial year 2023-24.

Eligible banks must meet at least three out of four specified criteria, encouraging improved governance and value creation, with potential incentives reaching up to 100% of annual basic pay for top executives.

(With inputs from agencies.)