Private bank attrition eases in FY26 amid digitisation-led workforce cuts

ICICI Bank, Axis Bank and Kotak Mahindra Bank reported lower attrition in FY26, while HDFC Bank saw a marginal rise as technology and digitisation reduced headcount

The attrition rate at most leading private sector banks eased in 2025-26 (FY26), even as lenders trimmed their workforce amid technology-led productivity gains and increased digitisation.

 

The largest private sector lenders, including ICICI Bank, Axis Bank, and Kotak Mahindra Bank reported lower employee attrition from an year earlier.

 

ICICI Bank's attrition rate declined to 15.6 per cent in FY26 from 18 per cent in FY25, while Axis Bank's fell to 22.36 per cent from 25.5 per cent. Kotak Mahindra Bank's attrition also moderated to 32.5 per cent from 33.3 per cent.

 

HDFC Bank, however, bucked the trend, with attrition inching up to 23.1 per cent in FY26 from 22.6 per cent in FY25. Even so, the rate remained well below 26.9 per cent in FY24 and 34.2 per cent in FY23.

 

Despite the marginal increase in attrition, the country's largest private sector lender reduced its employee strength to 211,178 at the end of FY26 from 214,521 a year earlier.

 

In its annual report, HDFC Bank said it continued to focus on employee engagement through competitive remuneration, career development programmes and employee welfare initiatives to attract and retain talent.

 

"We implement fair and transparent career development and performance management plans to create a sense of belonging for our employees," the bank said.

 

Kartik Narayan, chief executive officer of Apna Jobs Marketplace, said: “Attrition has moderated as employees are switching jobs less frequently. The post-COVID job market was highly competitive, but it has since cooled down. Compensation growth has normalised, and fewer competitors are hiring aggressively. As a result, employees perceive greater job stability and are less inclined to switch jobs.”

 

Employee headcount declined across the other major private sector lenders as well. ICICI Bank's workforce fell to 124,029 in FY26 from 129,177 a year earlier, while Axis Bank's permanent employee count declined to 101,337 from 104,453. Kotak Mahindra Bank's permanent employee strength also fell to 60,357 from 61,170.

 

Axis Bank attributed the lower headcount to productivity gains from sustained investments in technology.

 

During the bank's earnings call, Executive Director Subrat Mohanty said continued digitisation and improved branch productivity had enabled the lender to optimise its workforce.

 

The bank said its technology investments have allowed it to serve a larger customer base with a leaner workforce, rather than slowing its expansion.

 

“During the COVID period, banks went through an aggressive branch expansion and hiring cycle. Since then, they have become much more selective in recruitment, resulting in significantly lower hiring and AI and automation are replacing some incremental hiring needs,” Narayan pointed out.