Attrition to be a big problem for banks: RBI

The Reserve Bank of India (RBI) today said the banking system may increasingly face the problem of staff-attrition in the period ahead and banks will have to gear up to tackle the issue.

"We are going to see rise in the attrition rate. There is a need for adequate focus on HR management... Banks need to take adequate care of their manpower," RBI Deputy Governor KC Chakrabarty said at Bancon conference here today.

Banks are not putting adequate attention to improve their HR talent, Chakrabarty said, adding for better efficiency, they need to educate their staff to enhance their skills.

McKinsey Associate Partner Supriyo Sinha said nearly 63,000 employees of the public-sector banks will retire over the next three years and banks will have to devise ways to overcome this challenge.

Earlier this fiscal, leading PSBs like State Bank of India (SBI), Bank of Baroda, Indian Overseas Bank and Bank of India among others had announced their plan to hire over 30,000 hands this fiscal itself, undeterred by the economic downturn and lower sales volume.

The biggest lender SBI had started a head-hunt to support its fast expanding network by planning to hire about 20,000 clerical staff and around 5,000 supervisory staff by the fiscal-end, the bank said.

Bank of India (BoI) was planning to hire around 1,737 this fiscal itself to man its expanding network. This includes 500 officers, 500 clerical staff and 237 specialist officers in the next three to four months a BoI official had said.

Indian Banks Association Chairman MV Nair also shared a similar view saying nearly 58 per cent of the PSB employees will retire by 2012. The IBA is understood to have appointed a committee to study this matter in a comprehensive manner, Nair told reporters later.

Nair said rather than attrition, retirement of a large chunk of bank employees over the next two years might pose a bigger challenge.

Union Bank plans to hire 2,000 staff and will also conduct campus interviews to find the right talent, Nair, who is also the Union Bank chairman and managing director said.