India FX market boom fuels high salaries

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Mumbai, August 2:: The salaries of foreign exchange traders in India are expected to jump by up to 30 per cent this year, as the rising rupee stokes demand for hedging services and trading volumes swell.

Some traders are now earning as much as their counterparts in Asian centres like Singapore, and keeping experienced staff is increasingly expensive. Banks face turnover of up to a fifth of staff each year.

"Retention is the name of the game. Banks don't mind paying heavily for it. Treasury is making so much money that they don't mind sharing a bit of the profits," said Tzeitel Fernandes at human resources firm Hewitt Associates.

India's annual foreign exchange market turnover has grown to a gross $6.5 trillion in the fiscal year 2006/07 from $1.4 trillion six years earlier.

"Volumes flowing through the system are much more than last year," said Hitendra Dave, co-head of global markets for treasury at HSBC in India.

Dave guesses salaries have at least doubled in the past 12 to 18 months, while treasury revenues for the industry have doubled in the past year.

More commercial banks are offering treasury products to their corporate clients, whose overseas exposure is increasing as India's economy opens up, and foreign banks that are boosting operations in financial centre Mumbai are willing to pay more for talent.

Global houses like Credit Suisse, Lehman Brothers and Goldman Sachs have been ramping up in India and hiring experienced treasury sales and dealing staff. The new arrivals often don't train staff up themselves, they buy experienced talent, senior traders say.

"I lost a lot of people last year, but the bank is getting wise to the fact it's silly to lose people - that you have to do all you can to retain them," said one head of trading at a foreign bank that has been in India for several years.

Beating The Traffic

Traders say the average annual salary for a middle manager in treasury at a private sector or foreign bank is between 1.5 million and 2 million rupees (US$37,000-49,500). That's excluding bonuses, which can add another 8 million rupees, nearly $200,000.

That's still below Hong Kong, where middle-ranking foreign exchange traders pocket $220,000-300,000 a year, including bonus. But it's near or exceeding levels in Singapore, the world's fourth-largest currency trading centre, where traders earn about S$100,000 ($66,000) a year before sales commissions.