The RBI ensures that executive compensation, whether it is in the form of cash or stock, is appropriate, taking into account the financial position of the concerned bank and also the industry practice. The RBI has instructed the boards of the private sector banks to fix remuneration package of CEOs at a reasonable level in light of industry practice in India.
Further, the annual bonuses of CEOs of private sector banks are capped at a certain percentage of their base salary. The Remuneration Committees of banks, consisting of independent directors, are made responsible for implementation of compensation structure in banks. Restrictions on external debt intermediation by banks and FIs 30.