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Former SBI chairman Rajnish Kumar once remarked in a podcast that the market rent of the SBI chairman’s Malabar Hill residence could touch Rs 10 crore a month
The market rent of the SBI chairman’s Malabar Hill residence could touch Rs 10 crore a month. (PTI Photo)
What kind of life does the chairman of the country’s apex bank lead? If you thought a massive salary and corporate bonuses like their private sector counterparts, think again. The story of Dinesh Kumar Khara, former chairman of the State Bank of India (SBI), offers a fascinating contrast; one that blends modest paychecks with extravagant perks, all courtesy of the public sector’s unique compensation model.
During the financial year 2022–23, Khara took home a cash salary of just Rs 37 lakh – yes, you read that right. That’s a mere 7.5% bump from the previous year, and dramatically lower than what CEOs in the private banking sector command. For context, HDFC Bank CEO Sashidhar Jagdishan earned Rs 6.5 crore in the same period – about 17 times more than Khara’s earnings.
However, despite the humble figure on paper, the perks are nothing short of princely. Khara was allotted a government-owned sea-facing bungalow in Mumbai’s ultra-exclusive Malabar Hill, had access to a chauffeur-driven luxury car worth Rs 30-40 lakh, and enjoyed medical coverage, domestic and international travel privileges – all without spending a rupee from his pocket.
And the bungalow? That’s where eyebrows really shoot up. Former SBI chairman Rajnish Kumar once remarked in a podcast that the market rent of the SBI chairman’s Malabar Hill residence could touch Rs 10 crore a month, a claim that has drawn both astonishment and skepticism in equal measure. While some dismiss the figure as inflated, the fact that a public sector official occupies such high-value real estate underscores the enormous non-monetary value attached to the post.
Why This Wide Pay Gap Exists
The disparity between public and private sector pay isn’t accidental. It’s by design.
- Salary Caps: In India, the salaries of public sector bank executives are tightly regulated by the Ministry of Finance.
- No Bonuses, No Stocks: Unlike their private peers, public bank chiefs don’t receive performance bonuses or stock options, which means their take-home pay is mostly fixed.
- Public Welfare Model: The government’s focus for PSU banks is financial inclusion – not profit maximisation.
- Perks as Compensation: With cash limits in place, the system makes up for it in kind – lavish residences, official vehicles, and retirement benefits.
Private banks, on the other hand, operate in a cut-throat, profit-driven world. To attract and retain top-tier talent, they offer multi-crore annual salaries, massive bonuses, and equity-based incentives that can be worth crores.
Will PSU Banks Lose Talent?
That’s a growing concern. Many experts believe that the rigid pay structures in the public sector could drive talented bankers towards private banks or fintech firms. Yet, there are many who still value the stability, prestige, and pension security that a government job offers.
The story doesn’t change much with time either. When Khara’s predecessor, Rajnish Kumar (SBI Chairman from 2017 to 2020), held the reins, he too drew a similarly modest salary and enjoyed the same official bungalow and perks. The faces may change, but the framework remains frozen.
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