The attrition rates in the private sector banking industry have been significantly high, according to a RBI Internal Study.
The average attrition rate in the private sector bank group was around 25 per cent, with certain banks experiencing even higher levels over the past three years, per the central bank study on Attrition Rates in Private Sector Banks.
Deputy Governor Swaminathan J observed that “Post our interactions on this matter last year with select entities, we do see an improvement, but it is still a long way to go.
“The attrition numbers are not merely statistics; they are indicators of deeper challenges in the bank’s approach to employee engagement and retention.”
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If banks lose talented employees, especially at the junior and frontline levels, they are not just losing people — they are losing experience, customer relationships, and operational continuity, he said at the Conference of Directors of Private Sector Banks.
He cautioned that this may have a significant impact in the customer ownership and result in less than satisfactory experience at the frontline counters. Therefore, reducing attrition is not just an HR function; it is a strategic imperative.
“As directors, I would urge you to explore and support initiatives that emphasize career development, mentorship programs, competitive benefits, and a supportive workplace culture that makes employees feel valued.
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“By prioritizing employee stability, Boards are setting the foundation for long-term growth and building a bank that attracts and retains talent, and nurtures it for future leadership roles,” Swaminathan said.
He noted that rapid technological advancements in banking industry require frequent updates coupled with the need for specialized talent.
