Private sector banks in India are grappling with rising employee attrition, which has reached alarming levels of about 25%, according to the Reserve Bank of India’s (RBI) “Report on Trend and Progress of Banking in India 2023-24.” This high turnover rate is raising significant operational risks, including service disruptions and the loss of institutional knowledge.
The report highlights that attrition is particularly high in select private banks and small finance banks (SFBs). While the total number of employees in private banks surpassed that of public sector banks in 2023-24, the attrition rate has surged over the past three years. The RBI emphasizes that high employee turnover not only disrupts customer services but also increases recruitment costs and hampers long-term organizational stability.
The RBI has stressed the need for private banks to adopt strategic measures to reduce attrition. These include enhanced onboarding, robust training and career development opportunities, mentorship programs, competitive benefits, and fostering a positive workplace culture.
Additionally, the RBI’s report addresses concerns over irregularities in gold loans, urging supervised entities to review and strengthen their policies and controls in this area. The RBI also flagged the potential financial risks posed by climate change, recommending stronger regulatory frameworks and stress-testing mechanisms to safeguard financial stability and manage these emerging threats.
