HYDERABAD: Hiring at Indian banks, one of the country’s largest employers, has come to a disappointing halt. Public Sector Banks (PSBs), having the largest employee base among all commercial banks in the country, hired as fewer as 400 employees in FY21, according to the RBI’s latest Basic Statistical Returns of commercial banks released last week. This is perhaps the lowest net addition ever in the Indian banking history.
Still, that fares better than FY20, when state-run banks some of which were placed under the RBI’s prompt corrective action, downsized staff by about 38,000. From employing over 8 lakh in FY19, the total workforce was down to 7.7 lakh in FY20 and remained flat in FY21. Much of the trimming happened at semi-urban and urban branches, while rural and metropolitan areas saw a modest increase in workforce.
One of the reasons for the decline was also due to rationalisation of branches following the bank mergers.
In its biggest consolidation exercise, 10 state-run banks were merged into four last year. Prior to this, five associate banks were subsumed into SBI, while Vijaya Bank and Dena Bank were merged with Bank of Baroda. Another troublesome lender IDBI Bank was taken over by LIC. Effectively, the total number of PSBs is down to 12 from 27 in 2017.
On the other hand, private and small finance banks made up for the shortfall in hiring both in FY20 and FY21. While they together added nearly 1 lakh employees in FY20, the pace of hiring slowed down dramatically during the Covid-hit FY21 when they brought in just about 50,000 newer employees on board. While private banks hired over 78,000 in FY20, the number of new additions fell to 17,000 in FY21. Similarly, small finance banks, which added 40,000 jobs in FY19, managed to hire just about 9,000 in FY21. As on March 2021, the banking industry, including foreign and regional rural banks, employ over 15.6 lakh across the country.
With PSBs undergoing the consolidation drive, and amid talks of privatisation and rationalising operations, the Indian banking industry’s hiring grew by a dismal 1.8% in FY21, again perhaps the lowest pace ever recorded. Banks hired about 27,000 last fiscal against 80,000-odd jobs added in FY20.
