Is PSB workforce stagnant despite hiring 1.48 lakh people in 5 years?

Even as India’s <a id=” captionrendered=”1″ data-src=”https://etimg.etb2bimg.com/photo/123269648.cms” height=”442″ href=”http://hr.economictimes.indiatimes.com/tag/public+sector+banks” keywordseo=”public-sector-banks” loading=”eager” source=”keywords” src=”https://hr.economictimes.indiatimes.com/images/default.jpg” type=”General” weightage=”100″ width=”590″>Public Sector Banks (PSBs) collectively hired over 1.48 lakh people between FY 2020-21 and FY 2024-25, the total workforce has seen no meaningful expansion, according to a report by the Union Ministry of Finance.

As per data, the total staff strength across leading public sector banks such as SBI, Punjab National Bank and Bank of Baroda has seen only marginal changes between 2020-21 and 2024-25.

How the total number of employees at Public Sector Banks have changed in the last few years

Further, the report said that as on March 31, 2025, 96 percent staff are in position against their business requirement. The small proportion of gap is attributable to attrition on account of superannuation and other usual factors, including unplanned exits.

The figure of 1,48,687, mentioned in the report as the total number of people hired by public sector banks over the last five years, mainly refers to gross hiring, that is, the total number of employees recruited between FY 2020-21 and FY 2024-25. However, this number does not represent the actual increase in workforce strength. In fact, the net increase in the total employee base across all public sector banks during this period is only about 6,500 people rising from 9,12,160 employees in FY21 to 9,18,692 in FY25.

This indicates that the bulk of the 1.48 lakh hiring was aimed at replacing employees who retired, resigned or exited, rather than expanding the overall headcount.

Total number of employees in the last five years

Source: Public Sector Banks

For instance, SBI’s workforce moved from 2.46 lakh in FY21 to 2.36 lakh in FY25, a net reduction of about 10,000 employees. Similarly, Bank of Baroda saw its headcount shrink from 82,017 in FY21 to 73,742 in FY25.

Kunal Gaurab, Senior Consultant – Leadership Hiring & Development, said, “Digital banking advancements like SBI Yono, Baroda Connect and PNB One, along with the setup of 75 Digital Banking Units (DBUs) that function without staff, have significantly reduced clerical-level hiring across public sector banks.”

Gautam Ghosh, HR Consultant, also said that the staff strength in PSU banks has declined mainly due to retirements, attrition and digitization. While branches have expanded, automation has reduced the need for clerical roles. Post-merger restructuring and cost optimization have further shifted hiring towards specialist and mid-management roles, raising concerns about work pressure and service quality at the ground level.

What’s more striking is that this pattern is not limited to the larger players. Even mid-sized and smaller PSBs like Indian Overseas Bank and UCO Bank have either witnessed a minor decline or have hovered around the same staffing numbers.

The staff strength at Indian Overseas Bank, for example, has come down from 23,579 employees in FY21 to 20,966 in FY25. A similar trend is seen in Union Bank of India, where the number of employees came down from 78,203 to 73,945 in the same period.

Apparently, the hirings across the public sector banks have only managed to maintain the status quo, with the overall headcount across many banks either declining or growing very slowly. The recruitment target for FY26 stands at around 48,570, as per the report.

The data also shows considerable variance in workforce strategy across banks.

For instance, Bank of Maharashtra has steadily increased its workforce from 12,532 in FY21 to 14,591 in FY25 indicating an expansionary approach.

In contrast, Indian Bank has downsized its staff strength from 42,601 employees in FY21 to 39,778 employees in FY25.

This reflects how individual banks are recalibrating their manpower models based on their digital maturity, cost considerations and business outlook.

One key reason cited by experts for the near stagnation in the overall staff strength of PSBs is aggressive digitisation and centralisation of operations. With the rollout of AI-backed customer service bots, digital loan processing and mobile-first banking platforms, banks are increasingly shifting from manpower-intensive to tech-led operations. This shift has drastically reduced dependency on branch-level staff for everyday operations.

A bank official explained that another pressure point is the cost structure. Employee wages form a significant portion of PSBs’ operating expenses. With tight margins and non-performing asset (NPA) pressures, many banks have preferred natural attrition over active recruitment.

Moreover, when hiring does happen, it is increasingly skill-specific rather than volume-based. Banks are seeking talent in areas like cyber security, analytics and risk management, departing from the legacy model of mass hiring of clerks and probationary officers.

The report clarified that the requirement of manpower in each PSB is determined by the respective bank keeping in view various factors which include, inter-alia, business requirement, spread of activities, superannuation and other unplanned exits.

Further, appointment of officers and staff is done accordingly by the PSBs and it varies from year to year based on their requirements.

Interestingly, while the business per employee has surged, the workforce remains stagnant. For instance, SBI’s business per employee jumped from Rs 168.96 crore in FY21 to Rs 241 crore in FY24, a staggering 42.6 percent increase in just three years. Similarly, Punjab National Bank reported a growth in business per employee from Rs 23.84 crore in FY24 to Rs 26.86 crore in FY25.