Public sector banks' staff count rises for first time in five years

RBI data show public sector banks added staff in FY25 for the first time in five years, while private banks' headcount fell, led by a sharp drop at ICICI Bank

Public sector banks’ (PSBs’) employee count grew for the first time in five years while private sector banks’ staff strength saw a decline in 2024-25 (FY25), according to latest data released by the Reserve Bank of India (RBI).

 

The employee count of state-owned lenders rose 0.22 per cent year-on-year (Y-o-Y) to 757,641 at the end of March 31, 2025 from 756,015 in FY24. On the other hand, private banks recorded a 0.86 per cent drop in their employee count to 838,150 in FY25 from 845,407 in FY24.

 

PSBs earlier calibrated their employee count as they were focused on consolidation while improving balance sheets. Now having healthy balance sheets with easing regulatory environment, they have resumed hiring. Private banks, on the other hand, have been focussed on leveraging technology and digital initiatives rather than expanding headcount.

   

“Public sector banks had paused hiring due to consolidation, regulatory cleanup, retirements, and efficiency drives,” said Vivek Iyer, partner and financial services risk leader, Grant Thornton Bharat.

 

“They are now resuming recruitment in a calibrated manner, timed with improving balance sheets, expectations of regulatory easing, and domestic growth. This is delayed hiring aimed at filling gaps caused by attrition, mainly at mid-management levels. In contrast, private banks’ hiring is stabilising. They hire based on their business plans and they are increasingly relying on technology and digital initiatives to meet incremental demand rather than expanding headcount,” Iyer told Business Standard.

 

Among the PSBs, State Bank of India (SBI) added 3,930 employees to reach a headcount of 236,226, and Punjab National Bank (PNB) added 397 employees to 102,746.

 

The fall in employee count of ICICI Bank, which dropped 7.13 per cent to 130,957, was a major contributor to the drop in headcount of the private sector. HDFC Bank added 994 employees to 214,521, and Axis Bank added 121 employees to 104,453.

 

Recently, SBI hired over 1,000 probationary officers (POs), with 505 hired in June 2025, and another 541 onboarded in December 2025. The lender plans to hire 18,000 people in FY26, out of which around 13,500 will be clerical recruitments, and 3,000 will be POs and local-based officers, the management said.

 

Hiring momentum will continue for state-owned entities, Iyer said.

 

“Going forward, hiring momentum in public sector undertakings (PSUs) is expected to continue for at least the next twelve months. However, significant hiring for the private sector will occur only when demand is durable and sustained. While there may have been minor frontloading during the Covid period due to uncertainty, there was no major over-hiring, and subsequent rationalisation focused on redeployment and automation rather than layoffs. Private sector hiring is expected to pick up only in the next financial year, with a more visible uptick likely between mid-FY27 and the third quarter (Q3) of FY27, after which they are likely to evaluate again,” Iyer added.

 

The overall headcount in the banking system rose to 18,08,587 from 17,87,566 in FY24. Foreign banks’ employee count stood at 28,041, small finance banks (SFBs) had 177,797 people on their rolls, with 6,958 in payments banks. Among SFBs, AU Small Finance Bank is the largest employer, with a base of 50,946 staffers.

 

According to the FY25 annual report of private sector banks, large lenders reported decline in their employee attrition or turnover rate in the year as against FY24, as they focused on conducting more employee engagements, and wellness programmes, and incentivised better performers.