25% Attrition Rate in Private Banks Pose Operational Risks: RBI
Moneylife Digital Team 30 December 2024
While the total number of employees of private sector banks surpassed that of public sector banks (PSBs) during FY23-24, their attrition has increased sharply over the past three years, with an average attrition rate of around 25%, according to data released by Reserve Bank of India (RBI). While PSBs employed 756,015 employees, private banks have 845,841 employees as of FY23-24.
 
In its Report on Trend and Progress of Banking in India 2023-24, RBI says,"High attrition and employee turnover rate pose significant operational risks, including disruption in customer services, besides leading to loss of institutional knowledge and increased recruitment costs." 
 
In various interactions with banks, RBI says it has stressed that reducing attrition is not just a human resource function but a strategic imperative. "Banks need to implement strategies like improved onboarding processes, providing extensive training and career development opportunities, mentorship programmes, competitive benefits, and a supportive workplace culture to build long-term employee engagement," the central bank says.
 
According to RBI's data on bank-wise and category-wise employees of scheduled commercial banks (SCB), as of March 2024, all SCBs have 1.78mn (million or 17.88 lakh) employees. It includes 1.34mn (or 13.40 lakh) officers, 318,227 clerks and 129,005 sub-staff. 
 
PSBs employed 756,015 employees, including 413,276 officers, 248,117 clerks and 94,622 sub-staffs. On the other hand, private sector banks employ more number of officers. Private banks have 795,591 officers, 41,410 clerks and 8,840 sub-staff, taking the total number of employees to 845,841 as of FY23-24.
 
 
Among the PSBs, as expected, State Bank of India (SBI) employs the maximum number of employees at 232,296, followed by Punjab National Bank (PNB) at 102,349. Punjab and Sind Bank have the lowest number of employees (8,758) among all the PSBs. 
 
In the private sector, HDFC Bank Ltd is the largest employer, with 213,527 employees. It is followed by ICICI Bank Ltd at 141,009 and Axis Bank at 104,332 employees during FY23-24. Among PVBs, Nainital Bank Ltd has the lowest number of employees at 1,170.
 
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