High employee attrition of 25% in private banks: RBI Report

“High attrition and employee turnover rate pose significant operational risks, including disruption in customer services, besides leading to loss of institutional knowledge and increased recruitment costs.”

STC Monitoring Desk
December 30 (STC): Reserve Bank of India (RBI) in its latest Report on Trend and Progress of Banking in India 2023-24 among other things has reported high employee attrition rates across select private sector banks and small finance banks (SFBs). In percentage terms the employee attrition rate has been reported 25% in private banks, posing significant operational risk.
Even as the total number of employees of private banks surpassed that of public sector banks (PSBs) during 2023-24, their attrition has increased sharply over the last three years, with average attrition rate of around 25 per cent, reveals the RBI report.
“High attrition and employee turnover rate pose significant operational risks, including disruption in customer services, besides leading to loss of institutional knowledge and increased recruitment costs. In various interactions with banks, the Reserve Bank has stressed that reducing attrition is not just a human resource function but a strategic imperative,” it said.
The report suggests that banks need to implement strategies like improved on-boarding processes, providing extensive training and career development opportunities, mentorship programmes, competitive benefits, and a supportive workplace culture to build long-term employee engagement.(STC)