“The explanation given by the bank in this matter has been examined and found not satisfactory,” the RBI said in a letter to the bank on September 13.
ET has seen a copy of RBI’s instructions to the lender.
“Therefore, the request of the Bank to reconsider the direction for recovery of variable wages given to Ivan Nosov for the year 2021, as advised in our letter dated June 21, 2022, has not been accepted,” it said. Told.
The central bank has suggested India’s Sberbank unit to demonstrate compliance in two weeks. That deadline expired on Monday.
RBI did not respond to ET’s queries on the matter.
“Sberbank is interfering with the Reserve Bank of India and complying with all regulatory requirements,” said a spokesperson Russian bank,
Separately, the central bank also told the Russian lender that the fixed salary paid to CEOs should also be in line with the regulatory approval given in July last year.
The RBI had earlier sought an explanation from Russia’s Sberbank on what it sees as a violation of domestic banking rules amid an initiative to build a dedicated payments platform that would facilitate trade with Moscow, which is now in global commerce, ET The formal is largely cut off the grid. Reported on 21st July.
Russia’s largest bank reportedly paid bonus for performance year 2021 to its Indian CEO Ivan Nosov without RBI approval. The foreign lender reportedly did the same in 2019 and 2020 as well. Banking regulations in India require a lender to seek RBI approval on bonus payments to key executives.
“In view of the above violations and the Bank’s persistent supervisory concerns, the variable pay fixed for the performance year 2021 is nil and therefore the Bank is advised to recover the variable pay of Rs 3,32,37,433 paid to Mr. Ivan Nosov, CEO for the year 2021, and confirm the same to us at the earliest,” RBI said in a letter dated June 21.
Sberbank is currently facing global sanctions from the West after the Russo-Ukraine War. It has a branch in New Delhi. The branch is engaged in providing Bank Guarantee.
While the bank helps finance Indian buyers through various credit insurance products, the lender facilitates corporate financing of Indo-Russian joint ventures and Russian subsidiaries.
In addition, the bank plays an advisory role in terms of offering clients to the Russian and Indian markets.
During 2021-22, the bank’s net assets in India grew by 29% to Rs 943 crore, show data from Sberbank’s India balance sheet. The bank in India has a smaller deposit book – around Rs 70 crore versus Rs 52 crore a year ago.