RBI has been urging public sector banks (PSBs) to raise the bar of salary offered to its executives or else they might lose out to their private counterparts.

"The executive compensation in public sector is lower than that in the private sector...If public sector banks are required to compete with private sector banks on a level playing field, there is a good case for compensating them too on a competitive base," Subbarao had said.

Speaking on this issue, HSBC India head Naina Lal Kidwai said that the PSBs cannot expect that their private peers would cut on their salaries so they need to raise their compensation limits.

"It is in the interest of the domestic banking industry that the public sector banks upgrade their remuneration package. But they cannot expect us to bring down our salary package," she said.

On the same note, SBI Chairman O P Bhatt said, "of course, our salaries have to go up."