Why Private Bank Jobs Slipped While PSU Staffing Grew

For the first time in several years, aggregate employment across major private sector banks has seen a decline in the financial year 2024–25 (FY25), primarily driven by a significant reduction in headcount at ICICI Bank.

Conversely, Public Sector Undertakings (PSU) banks, which had long been characterized by shrinking staff numbers due to consolidations and retirements, have reported a marginal “inching up” of employee strength.

This shift signals a maturing digital landscape where private lenders are prioritizing automation and operational efficiency, while state-run lenders are ramping up recruitment to manage credit growth and fill vacancies left by a massive wave of retirements.

The Private Sector Slump: The ICICI Bank Factor

The primary catalyst for the decline in private sector banking employment is ICICI Bank, India’s second-largest private lender.

Reports indicate that ICICI Bank’s workforce contracted by several thousand roles in FY25.

Analysts attribute this not to financial distress, but to a “technological recalibration.”

The bank has successfully transitioned a vast majority of its retail and corporate interactions to digital-only platforms, reducing the need for traditional “brick-and-mortar” staff.

While HDFC Bank and Axis Bank maintained relatively stable or slightly growing headcounts, they too have slowed the aggressive hiring pace seen in the post-pandemic years of FY23 and FY24.

The emphasis has shifted from “feet-on-street” sales teams to specialized roles in cybersecurity, data analytics, and AI-driven customer service.

PSU Banks: The Great Recruitment Drive

In a surprising reversal of a decade-long trend, PSU banks have seen their headcounts rise in FY25.

Led by the State Bank of India (SBI) and Punjab National Bank (PNB), state-run lenders have embarked on large-scale recruitment drives for both Probationary Officers (POs) and Clerical staff.

Several factors drive this PSU “hiring spree”:

• Filling the Retirement Gap: A massive cohort of staff hired in the 1980s has reached retirement age, necessitating a fresh influx of talent.
• Expansion into Semi-Urban Areas: While private banks go digital, PSU banks are still expanding their physical presence in Tier-3 and Tier-4 cities to support government-led financial inclusion schemes.
• Technological Modernization: PSU banks are hiring specialized IT cadres to overhaul their legacy systems and compete with the agile interfaces of private competitors.

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