HYDERABAD: Perhaps for the first time in recent years, job creation at public sector banks saw a de-growth of 1.4 per cent in FY18. Though some banks like the scam-hit Punjab National Bank and merger-bound Bank of Baroda remained active in the hiring market, net job additions at 21 nationalised banks fell as 11 state-run lenders had to let go of 21,438 employees, probably due to retirement.

SBI alone lost about 16,000 employees in FY18 following its merger with associate banks last April. In fact, the country’s largest lender has been seeing a de-growth over the past few years. From 2.8 lakh employees in FY15, its employee count is now down to 2.6 lakh.

According to RBI’s Statistical Tables Relating to Banks in India: 2017-18 released Friday, foreign banks too stayed away from the job market with their overall headcount reducing to 24,409 in FY18 from 24,868 in FY17. In fact, foreign lenders employ less than small finance banks, which started operations just two years ago and are now the fastest job creators with their employee count registering a twofold increase at 44,340 in FY18.

Crumbling under the toxic loan pile, PSBs lost their position as one of the largest employers. This, at a time when private peers are ramping up headcount, business and market share. For instance, in FY18, private lenders’ employee base shot up 4.5 per cent from 4 lakh to 4.2 lakh. As more and more PSBs took serious stick from RBI, which freezed lending, hiring and branch expansion for some, private banks seized the opportunity with Yes Bank and Kotak Mahindra nearly doubling their headcount to 18,000 and 36,000 respectively.

Still, banking as a sector saw lower employee growth of 2.7 per cent in FY18, as against 3.5 per cent registered in FY17. This is solely due to the lackluster performance of state-run banks, who on an average hired 17,000 every year in the past five years. And if the pace of employee additions in private banks continues, they may soon overtake nationalised banks (excluding SBI) as the largest employers. In 2012, they employed nearly 5 lakh, while private banks’ workforce stood just half at 2.5 lakh. This is narrowing and as on FY18, nationalised banks employed 5.8 lakh, while private players’ workforce inched up to 4.4 lakh.

There also exists a gender gap with the sector predominantly employing men. Of the 13 lakh, just about 22 per cent or roughly 2.8 lakh comprise women. The banking sector is one of the largest employers hiring over 13 lakh and if the sector continues to add fewer jobs, it can derail the government’s job creation mandate.

** This article was originally posted on THE NEW INDIAN EXPRESS by Sunita Natti