The Reserve Bank of India (RBI) has rejected reconsidering Sberbank’s pay-related requests for its India CEO Ivan Nosov, ordering the Russian lender to recover the excess sum paid to him as bonuses in 2021 and comply with the directive within two weeks.
“The explanation provided by the bank in the matter was examined and the same was not found satisfactory,” the RBI wrote in a letter to the bank on September 13.
The central bank has suggested India’s Sberbank unit to demonstrate compliance in two weeks. That deadline expired Monday.
The RBI did not respond to ET’s queries on the matter.
“Sberbank is interfacing with the Reserve Bank of India and complying with all requirements of the regulator,” said a spokesperson from the Russian bank.
Separately, the central bank also told the Russian lender that the fixed pay given to the CEO must also be in line with the regulatory approval given in July last year.
Russia’s largest bank allegedly paid a bonus to its Indian CEO Ivan Nosov for performance year 2021 without the RBI’s approval. The foreign lender had also reportedly done so in 2019 and 2020. Banking rules in India require a lender to seek the RBI’s approval on bonus payments to key executives.
“In view of the above violation and persistent supervisory concerns of the bank, the assessed variable pay for the performance year 2021 stands nil and the bank is therefore advised to recover the variable pay of RUB 3,32,37,433 granted to Mr Ivan Nosov, CEO for the year 2021, and confirm the same to us at the earliest,” the RBI said in a letter dated June 21.
While the bank helps finance Indian buyers via different credit insurance products, the lender facilitates corporate financing of Indo-Russian joint ventures and Russian subsidiaries.
During 2021-22, total assets of the bank in India rose 29% to Rs 943 crore, show data from the Sberbank’s India balance sheet. The bank has a tiny deposit book in India – at about Rs 70 crore versus Rs 52 crore a year ago.