Russia’s largest bank reportedly paid a bonus for performance year 2021 to its Indian CEO Ivan Nosov without RBI’s approval, people familiar with the matter told ET. The foreign lender reportedly did the same in 2019 and 2020 as well. Banking regulations in India require a lender to take 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.
ET has seen the copy of the letter. In local terms, this amount is around Rs 4.78 crore.
“Sberbank in India operates strictly in accordance with local regulations and in full compliance with RBI’s recommendations,” a Sberbank official texted via WhatsApp in response to ET’s mailed query.
RBI did not comment on the matter.
The Indian central bank has advised the Russian lender to submit its comments on the role of the CEO for the said violation within 30 days from the receipt of the letter dated June 21. It is not yet known whether Sberbank responded to the RBI note.
Sberbank is currently facing global sanctions from the West following the Russo-Ukraine War. It has a branch in New Delhi. The branch is engaged in providing Bank Guarantee. A market source said that it may have applied for some other branch license.
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.
“The bank does not take deposits as it hardly lends. Most of the money is made in bilateral trade and forex businesses,” said one of the above persons.
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.
RBI said, “Despite the bank’s acceptance of the contents of our displeasure letter dated July 22, 2021 on payment of bonus without the approval of RBI for the years 2019 and 2020, the bank has again paid the bonus to its CEO. ”