After having initiated a probe into high profits made by some MFIs, industry body Micro Finance Institutions Network (MFIN) today said it will now launch a survey on salary structures of CEOs and other senior functionaries of companies.
MFIN CEO Alok Prasad said that as of now there doesn’t appear to be a problem with the compensation packages of MFIs and they seemed to be in line with the NBFC industry.
“Except in one case, the total compensations of the CEOs are definitely in line with regard to the NBFC industry bench mark. We are in the process of initiating a compensation survey across the industry quite shortly. Based on the survey results, we will look at what are good benchmarks for the industry,” Mr. Prasad told PTI.
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Recent media reports have said that some MFI promoters and senior officials are drawing salaries in crores of rupees.
Mr. Prasad, however, brushed aside allegations that the salaries of the top brass at MFIs are high. He said all the details are available in the public domain and one can check for the veracity.
Earlier, MFIN said it will set up a panel to probe the alleged “undue profits” made by promoters of MFIs, when they were converted to NBFC-MFIs from NGOs. It had announced that it would complete a probe into the reports of the undue profits within 30 days.
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Mr. Prasad, however, did not specify the timeframe for completing the new survey.
“I can’t give you any indication as to when the survey will be completed. But it will start very soon. We will have to cover 45 MFIs. I am not sure how long it will take,” Mr. Prasad said.
“First, we will get the complete picture of the industry. And once all the data is available, then the call can be taken on whether the packages are all right or high or low. Based on that, we will decide whether to put benchmark or not,” he added.
Mr. Prasad said the MFI industry has a fund requirement of Rs 6,000 crore as of now.
“Selectively, banks began to look at restarting lending to MFIs. If you look at the total exposure in the country, it is around Rs 25,000 crore. Based on that, about a quarter is required so roughly Rs 6,000 crore is roughly what is required at the moment,” he added.