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Revised PLI Scheme for Public Sector Bank Executives

  • 21 Nov 2024

On 19th November 2024, the government introduced a revised performance-linked incentive (PLI) scheme aimed at motivating senior executives in public sector banks (PSBs).

  • The scheme will be effective from the financial year 2023-24, with eligibility assessed based on four key parameters, including a positive Return on Assets (RoA) and lower net non-performing assets (NPA).

Key Points

  • Eligibility Criteria: The scheme evaluates banks based on four parameters, of which at least three must be met for eligibility. These include positive RoA and low NPA levels.
  • Committee Oversight: A committee, led by the Secretary of the Department of Financial Services (DFS), will assess the banks and their governance mechanisms, including any major violations or malpractices that may affect the bank's reputation.
  • Incentive Structure: The PLI for senior executives, including Executive Directors (EDs), Managing Directors (MDs), and Chairman of the State Bank of India (SBI), could reach up to 100% of their annual basic pay.
  • Performance Evaluation: The committee will determine which banks are eligible for the PLI scheme and also assess the eligibility of individual officers.