Compensation trends in the Indian Banking sector and the various benefits that are offered to the employees of the RBI Under RBI Act

1. COMPENSATION &
BENEFITS
BFSI SECTOR SALARY & COMPENSATION TRENDS
VRUNDA MEHTA
Vrundamehta777@gmail.com

2. BFSI SECTOR
• Banking, Financial Services and Insurance
• Indian banking industry the third largest in the world by 2025
• The present Rs 64 trillion (US$ 1.17 trillion) Indian banking industry is governed by
the Banking Regulation Act of India, (1949)
• RBI manages the country's money supply and foreign exchange and also serves as a bank
for the Government of India and for the country's commercial banks
• The Indian economy will require additional banks, and expansion of existing banks to meet
its credit needs

4. RESERVE BANK OF INDIA (RBI)
• RBI is the premier employers of India.
• It is the giant of money market and banker to the nation.
• Reserve Bank employees, generally, have a 5-day week at work, postings in metros or state
capitals, easily adjustable work atmosphere and best in industry pay packages

5. RBI HIERARCHY LEVELS
• Seniority levels of RBI Officers are divided into Groups (A to F)
• Group 'A' is junior-most while Group 'F' is the senior-most level containing Officers like DeputyGovernor, Governor, etc.
• All these officers collectively are called as Class-I employees
• Apart from these employees RBI also has a large number of Class-III and Class-IV employees which
work as service staff and other subordinate levels
• There is no Class-II level in RBI

6. RECRUITMENT
• Almost annually, direct recruitment of Officers is carried out at Group 'A' & 'B' levels and at Group 'C'
& 'D' levels for experienced people.
•
While Group 'A', 'C' & 'D' recruitment is nominal
• There are frequent recruitment of college graduates and postgraduates at Group 'B' level through
examinations conducted by Reserve Bank of India Services Board (RBISB)
• Salaries of officers are also differentiated on the basis of these levels.

7. BASIC PAY
CADRE LEVEL
GROUP 'A'
GROUP 'B'
GROUP 'C'
GROUP 'D'
GROUP 'E'
GROUP 'F'
BASIC PAY AT START
OF SCALE
17,100
21,000
28,350
39,850
42,300
60,600
ANNUAL INCREMENT
1,000
1,000
1,000
1,200
1,300
1,600
• Basic pay or base salary is the amount on which other components of salary will be based
• Basic Salaries for Group 'B' Officers are 21000.
• These will be supplemented by Dearness Allowance (58+ %), House Rent Allowance (10+
%), etc. making the gross salary well above 40,000

8. LOCAL AND FAMILY ALLOWANCE
• All Officers are eligible for it. it is available for all Officers other than Group 'F'.
• It is subject to maximum ceiling which varies with Level
CADRE LEVEL
LOCAL ALLOWANCE
L.A. CEILING
FAMILY ALLOWANCE
F.A. CEILING
GROUP 'A'
5% OF BASIC
1,300
4% OF BASIC
1,100
GROUP 'B'
5% OF BASIC
1,300
4% OF BASIC
1,100
GROUP 'C'
5% OF BASIC
1,300
4% OF BASIC
1,100
GROUP 'D'
5% OF BASIC
1,600
4% OF BASIC
1,200
GROUP 'E'
5% OF BASIC
1,600
4% OF BASIC
1,200

9. GRADE AND SPECIAL ALLOWANCE
• These allowances are given to all officers who are confirmed in their grade. In addition to being
confirmed,
• Officers should satisfy the eligibility criteria. The amount of Grade and Special allowance per
month are as follows
CADRE LEVEL
GRADE ALLOWANCE
SPECIAL ALLOWANCE
GROUP 'A'
GROUP 'B'
GROUP 'C'
GROUP 'D'
GROUP 'E'
GROUP 'F'
1,500
2,250
4,500
6,750
9,000
10,000
2,500
2,500
2,500
2,500
5,500
0

10. MONTHLY REIMBURSEMENTS - EDUCATIONAL,
HOUSEHOLD AND TELEPHONE
Employees are also eligible for reimbursement of amounts incurred on Education fees, Telephone
bills and also for employing domestic helpers.
CADRE LEVEL
EDUCATIONAL (Rs)
HOUSEHOLD (Rs)
TELEPHONE (Calls)
GROUP 'A'
GROUP 'B'
GROUP 'C'
GROUP 'D'
GROUP 'E'
GROUP 'F'
2,000
2,000
2,000
2,000
2,000
2,000
2,000
2,000
2,000
3,000
3,000
4,000
500
800
1,500
2,000
2,000
3,500

11. CONVEYANCE EXPENSES
• All the employees are eligible for a quota of petrol depending on their City and Grade.
• Those living in Mumbai, New Delhi, Chennai, Hyderabad or Bangalore get an extra 30 liters
above the quota for the Group.
• Those who don't own a car are given cash instead of petrol.
• However, it is advantageous for car owners because the cash payment is less and also the fact
that car owners also receive monthly vehicle maintenance allowance
CADRE LEVEL
PETROL FOR CAR
OWNERS (Ltrs)
REIMBURSEMENT FOR
OTHERS
CAR MAINTENANCE
ALLOWANCE
DIRVER ALLOWANCE
GROUP 'A'
120
4,000*
0
0
GROUP 'B'
120
4,000*
0
0
GROUP 'C'
150
5,000*
1,000
5,500
GROUP 'D'
180
6,000*
2,500
5,500
GROUP 'E'
210
6,000*
2,500
7,000
GROUP 'F'
270
6,000*
2,500
7,000

12. ANNUAL REIMBURSEMENTS - MEDICAL,
BOOK GRANT AND BRIEFCASE
• Apart from monthly reimbursements, there are certain allowances which are permitted to be
reimbursed annually.
• These are eligible on showing the receipts or bills. The maximum permissible amount for
medical, book grant and briefcase allowances are
CADRE LEVEL
MEDICAL
BOOK GRANT
BRIEFCASE
GROUP 'A'
4,000
4,000
5,000
GROUP 'B'
4,000
4,500
7,000
GROUP 'C'
4,000
5,000
7,000
GROUP 'D'
5,500
6,000
9,000
GROUP 'E'
5,500
6,000
9,000
GROUP 'F'
5,500
7,000
9,000

13. EASY LOAN FOR PURCHASE OF
CAR/BIKE/PC
• Concessional loans are available to all employees planning to purchase either a car, bike or a
Personal Computer/laptop.
• Loan can be retaken after repayment of old loan and expiry of minimum period of 4,1 and 5 years for
Car, Bike and PC, respectively.
CADRE LEVEL
AMOUNT PERMISSIBLE
GROUP 'A'
70,000
GROUP 'B'
70,000
GROUP 'C'
90,000
GROUP 'D'
1,10,000
GROUP 'E'
1,50,000
GROUP 'F'
2,00,000

14. PURCHASE ITEM
LOAN ELIGIBLE
INTEREST RATE
CONDITIONS
CAR
7,00,000
7%
MAXIMUM LIMIT = 90% OF
COST
MOTOR BIKE
75,000
6%
MAXIMUM LIMIT = 90% OF
COST
PC
50,000
6%
MAXIMUM LIMIT = 90% OF
COST

15. MAJOR FACTORS DEFINING PAY
Bipartite Settlements with Workmen
• Indian Banks' Association has been representing managements of banks in negotiations with
recognized Trade Unions for wage settlement of disputes resolution since 1966
• This meeting is held every 4 years where the major changes and demands of the union are
discussed and implemented by all the banks which come under the agreement
Banks that come under this agreement
•
•
•
•
Public sector banks
SBI associate banks
Private sector banks
Foreign Banks

16. II Bipartite Settlement dated 12.10.1970
Major achievements of this settlement were abolition of classification of areas for the purpose of pay
scales, DA, reduction in span of scales of pay from 25 to 20 years. The settlement was signed with
single majority union in the banking industry viz. AIBEA
III Bipartite Settlement dated 01.08.1979
Under this settlement, State Bank of India also became a party to the Industry level Bipartite
Settlement along with other 'A' Class banks.
Commercial banks follow Hire & Fire policy
Exceptions are Old private sector banks which have been established before 1991

17. COMMERCIAL BANKING
• Commercial Banks are those profit seeking institutions which accept deposits from general public
and advance money to individuals like household, entrepreneurs, businessmen etc
• .
• Work with the prime objective of earning profit in the form of interest, commission etc
• The operations of all these banks are regulated by the Reserve Bank of India
• The main source of income of a commercial bank is the difference between these two rates which
they charge to borrowers and pay to depositors.
Examples of commercial banks – ICICI Bank, State Bank of India, Axis Bank, and HDFC Bank.

18. CLASSIFICATION OF COMMERCIAL BANKS
Scheduled banks
Banks which have been included in the Second Schedule of RBI Act 1934. They are categorized as
follows
• Public Sector Banks
The banks in which majority of stake is held by the government. Eg. SBI, PNB, Syndicate Bank, Union
Bank of India etc.
• Private Sector Banks
The banks in which majority of stake is held by private individuals. Eg. ICICI Bank, IDBI Bank, HDFC
Bank, AXIS Bank etc.
• Foreign Banks
The banks with Head office outside the country in which they are located. Eg. Citi Bank, Standard
Chartered Bank, Bank of Tokyo Ltd. etc.
Nonscheduled commercial banks
The Banks which are not included in the Second Schedule of RBI Act 1934.

19. RECRUITMENT

20. offering high salary packages with lucrative incentives to attract and retain their talented work force

21. SALARY IN COMMERCIAL BANKS

22. Salary by Years of experience

23. Salary offered by some banks

24. Bonus Offered

25. Salary by State or Province

26. SKILLS THAT ARE ESSENTIAL
• Analytical skills, capability to study regulation and desire to get business are must-haves to
build a long and successful career in the BFSI sector.
• And to grow beyond the first two levels, inter-personal skills are most essential
• It is very important for new joiners to understand that they are using public money; hence
sourcing business must be done with extreme care.
• Diligent young people with patience will be useful in the Banking sector

27. KEY SKILLS
Key banking skill 1: intellect
A commitment to learning and a hunger for dealing with challenging situations is key.
Key banking skill 2 : innovation
entrepreneurial skills are vital, meaning the ability to think innovatively and spot areas for development.
Key banking skill 3: resilience
Ability to work under pressure, such as with impending deadlines and for prominent clients.

28. Note :
Detailed JOBS In the sector with the annual pay depending on the experience will be found in
the last two pages of the report
The 3 page tables gives complete details about the kind of jobs at various hierarchy levels and
the salary that is usually paid to these officers
Thank you