As India’s private banks tighten costs amid margin pressures and shifting regulatory landscapes, FY25 is turning out to be a year of muted compensation growth for top executives. According to latest regulatory filings, Kotak Mahindra Bank’s CEO Ashok Vaswani drew the highest remuneration among private bank chiefs, even as most peers saw only modest or no hikes at all.
The Numbers: Who Earned What?
Here’s a snapshot of FY25 pay packages (fixed + variable + perks):
| Bank | CEO | FY25 Compensation (₹ Cr) | YoY Change |
|---|---|---|---|
| Kotak Mahindra Bank | Ashok Vaswani | ₹21.06 Cr | New appointment; highest in sector |
| ICICI Bank | Sandeep Bakhshi | ₹16.2 Cr | No major hike |
| Axis Bank | Amitabh Chaudhry | ₹9.8 Cr | 5% increase |
| HDFC Bank | Sashidhar Jagdishan | ₹10.5 Cr | Flat vs FY24 |
| IndusInd Bank | Sumant Kathpalia | ₹9.1 Cr | Small rise |
| Federal Bank | Shyam Srinivasan | ₹3.8 Cr | Consistent with FY24 |
Notably, Ashok Vaswani—who took over as Kotak Bank’s MD & CEO in January 2024—was awarded a hefty joining bonus and stock options, lifting his total package above others. His global banking background and leadership mandate for digital transformation justified the premium pay.
Industry Context
While executive salaries in banking have historically trended upward, FY25 presents a more cautious approach:
Tighter net interest margins (NIMs) due to rising deposit costs
Greater scrutiny from the RBI on compensation structures
Shareholder activism pressuring boards to tie rewards to performance metrics
According to institutional investors, the trend marks a “return to rationality” after a few years of aggressive pay hikes linked to post-COVID growth rebounds.
Expert Views
CA Manoj Kumar, BFSI consultant:
“Banks are being pragmatic—rewarding leadership talent where needed, but also signaling cost discipline in a high-rate environment.”
CA Manish Mishra:
“The RBI has been clear about aligning CEO pay with long-term risk-adjusted returns. We’re seeing that in the flatter incentive curves this year.”
Performance vs Pay: Are They Aligned?
While most CEOs saw flat pay, bank performance in FY24 was robust:
HDFC Bank and ICICI Bank maintained double-digit credit growth
Axis Bank improved asset quality metrics
Kotak Mahindra saw steady net profit growth, despite leadership change
However, the realignment of pay may shift more towards ESG metrics, digital maturity, and succession planning going forward—especially after RBI’s tightening stance on governance in FY25.
Conclusion
The FY25 compensation disclosures across private banks show a sector in strategic realignment—balancing leadership continuity, regulatory compliance, and investor expectations. Ashok Vaswani’s package stands out for its onboarding nature, but the broader trend suggests that pay growth is being moderated, reflecting both caution and accountability.
