RBI Governor Shaktikanta Das expressed concern over high attrition rates in certain private sector banks and emphasised the need for dedicated core teams to tackle this issue. Speaking at the annual BFSI Insight Summit, he also highlighted changing career perspectives among the younger generation.

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Despite global geopolitical uncertainties, Das remained optimistic about India's robust economic growth and anticipated positive second-quarter gross domestic product (GDP) performance, asserting India's readiness to handle global challenges.

Spike in attrition at private banks

According to annual reports from prominent banks including HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, and IndusInd Bank, there was an average attrition rate of 35-40% during the financial year 2022-23 (FY23). HDFC Bank reported 34.15% attrition, Kotak Mahindra Bank 46%, Axis Bank nearly 35%, Yes Bank 43%, ICICI Bank 30.9%, and IndusInd Bank approximately 51%.

Industry experts attribute this to fierce competition for talent, especially from the fintech sector, and a reluctance to engage in mass hiring due to persistent high employee turnover. “Some organisations are taking to campus plus strategies to build their pool of bankers, rather than hiring from each other,” Rajkamal Vempati, President and head of Human Resources at Axis Bank told Moneycontrol. She added that hiring remains at an all-time high.

Meanwhile, Yes Bank CEO Prashant Kumar said in an earnings call, "We are seeing attrition mostly on the sales side which is a trend across the banking industry. The bank is working towards controlling it and would "not like to see an overall attrition of more than 25-30%."

Another issue that banks are dealing with is the high attrition of junior-level employees. "On average, we saw the attrition rate at around 30 percent. But the highest attrition was seen at the entry-level positions, which stood at around 40 percent to 50 percent," Srinivasan Vaidyanathan, Chief Financial Officer (CFO) of HDFC Bank, said at a post-results media call.

Amitabh Chaudhry, Managing Director (MD) and CEO of Axis Bank also mentioned the same thing. "Axis Bank has seen maximum attrition at around 33-35 percent at the junior and branch levels," said Chaudhry at a post-results media call.

First Published:Nov 1, 2023 2:25 PM IST