New Delhi: The Finance Ministry has instructed public sector banks (PSBs) to speed up re-KYC verification for customers. It has also introduced a new performance-linked incentive (PLI) scheme for senior executives, starting from the financial year 2023-24.
Under the revised scheme, executives like Managing Directors and Executive Directors in nationalized banks, as well as senior officers at SBI, can earn up to 100% of their basic annual salary as incentives. However, banks must meet at least three out of four key criteria to qualify. These include maintaining a positive return on assets (RoA) and reducing net non-performing assets (NPAs).
A committee appointed by the government will assess the banks’ eligibility. This panel, led by the Secretary of the Department of Financial Services (DFS), will also include senior officials from the ministry and the Chief Executive of the Indian Banks’ Association (IBA). The committee will evaluate bank performance and governance during the assessment period, focusing on whether there have been any major violations or issues that could damage the banks’ reputation.
The updated scheme replaces the 2018 guidelines and is part of the government’s effort to improve accountability and performance in PSBs. By linking incentives to measurable outcomes, the ministry aims to encourage better governance and stronger financial health in the sector.
This move aligns with broader reforms aimed at boosting public confidence, improving transparency, strengthening accountability and ensuring efficient management of public sector banks.
