MUMBAI: Unbelievable, but the salary of Varsha Purandare, MD & CEO of SBI Caps, had almost tripled between FY16 and FY17.The sudden and hefty increase raises eyebrows, and comes amid reports that RBI has red-flagged SBI’s proposal to revamp its merchant banking subsidiary citing potential conflict of interest.In fact, Purandare’s annual compensation was much more than that of the Chairman of India’s largest lender SBI, which is also the holding company of SBI Caps. Coupled with the increasing reliance of public sector banks on SBI Caps for project financing and debt restructuring besides other services, the quantum of emoluments indicates how powerful the investment banking firm has become.
For instance, in FY16, Purandare’s annual salary including sitting fees stood at Rs 11.27 lakh per annum, but sharply rose to Rs 35.19 lakh in FY17 — higher than SBI’s then Chairman Arundhati Bhattacharya’s Rs 28.96 lakh. Purandare took over as MD & CEO of SBI Caps in December, 2015, and her compensation in FY16 was lower than predecessor Rajnish Kumar’s Rs 13.39 lakh. Kumar, now Chairman of SBI, served as MD & CEO of SBI Caps between July, 2014 and November, 2015.
Purandare couldn’t be immediately reached, while Dinesh Kumar Khara, Board Member, SBI and Audit Committee member of SBI Caps declined comment.“Compensation structure depends on the area of business. SBI Caps being in investment banking, key managerial personnel could be paid more in order to retain talent and by paying competitive market prices,” Shriram Subramanian, Founder of InGovern Research Service said.
Sources said the reason for the steep increase was to even out the pay scale among top management. At Rs 11.27 lakh in FY16, Purandare’s salary was lower than SBI Caps’ company secretaries Amit Shah and Nilesh Shah who drew Rs 16 lakh and Rs 30 lakh respectively. The CFO was paid a neat `20.37 lakh. Following the raise in FY17, Purandare’s annual takehome shot up to Rs 35.19 lakh, more than Shah’s Rs 30.75 lakh and CFO Navinchandra Amin’s Rs 12.13 lakh per annum.