Perhaps a more detailed reason b/h why Madhivanan Balakrishnan left IDFC First Bank.
Source: When bankers’ pay was brought under scrutiny, no one saw this coming | Mint
For instance, six months after he was promoted as executive director at IDFC First Bank Ltd, Madhivanan Balakrishnan stepped down in December. In his resignation letter, Balakrishnan, who joined IDFC First in 2019 as chief operating officer, said he plans to pursue an opportunity in healthcare that matches his long-term plans for his family and offers higher pay.
Two bankers aware of the matter said on condition of anonymity that RBI had approved his new salary with a 25-30% cut (from above ₹3 crore earlier) after he was elevated as whole-time director in June 2023. The central bank felt Balakrishnan was already drawing a high package based on his previous experience at ICICI Bank Ltd (where he was chief technology and digital officer), and IDFC First being a smaller bank could not pay as much, they said.
“The logic that RBI gave in Balakrishnan’s case was that IDFC First Bank was in the second cluster of banks. The regulator is doing benchmark comparison based on the size of banks,” the first banker said.
The issue gains importance because such oversight by RBI could lead to a talent crunch in the top management of private banks. “Balakrishnan’s exit has touched a raw nerve. The main question is, how to retain talent in banking if RBI continues to be so stringent with compensation,” said a former chief executive officer (CEO) of a private sector bank.
When contacted, Balakrishnan said, “The opportunity that I am exploring has a higher compensation, which would certainly be beneficial given the last few years of my career. But I would like to reiterate that the primary reason for moving out is the bigger entrepreneurial opportunities that could open up for me and my family.”
Tl;dr – Its money, and bank, despite its desire to retain, couldn’t do so because regulator (RBI) wouldn’t let it overpay to retain.
| Subscribe To Our Free Newsletter |
