India FX market boom fuels high salaries

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Mumbai, August 2:: wealth to beat the traffic and upgrade their homes.

One senior currency trader, who moved from a private sector Indian bank to a foreign one, used to commute for an hour and a half on the city's overflowing trains. After a big bonus last year, he has a Honda City sedan and a bigger apartment just half an hour's drive from his office.

The advent of private equity and venture capitalists has also taken a toll on employers' wage bills and staff turnover.

"It's a huge drain in talent on treasury, which has contributed to the rise in wages and attrition," Fernandes said, adding banks were getting creative to retain staff, offering them equity, deferred bonuses and overseas postings.

Some banks also train up B or C teams.

"We always have people sitting on the bench," said a senior trader at an Indian bank. ICICI Bank, India's largest private bank, says its treasury team has grown by 63 per cent since March 2006, on top of a 60 percent expansion in the 12 months before.

Seasoned market players doubt the boom times will last.

They expect consolidation between local banks as a central bank regulatory review nears in 2009. Others think the sector will see an influx of talent attracted by the high pay, eventually forcing down wages.

For now, the only way to do business is to pay up.