Staff at your neighbourhood PSU bank is working harder than you think

₹19.6 lakh in FY25 compared to ₹14.5 lakh for a private bank employee, according to data released by the Reserve Bank of India (RBI) on 29 December. The gap has widened since FY24, when the per-employee profit of government-owned banks stood at ₹15.2 lakh, surpassing ₹14 lakh for their private peers.Profit per employee is a key metric that tracks staff productivity.India’s public sector banks had an image of being inefficient, with governments continually injecting fresh capital into them each year.

In 2019, the Centre decided to merge 10 public sector banks into four, a move aimed at consolidating the sector into stronger and larger lenders.“The rate at which employees of PSU banks have been getting superannuated is higher than how fast they are being replaced,” said Ashvin Parekh, managing partner at management consulting firm Ashvin Parekh Advisory Services LLP. “Over the past decade or so, public sector banks have not recruited as many employees as they have superannuated each year.”This trend is particularly pronounced in larger banks and seems to be strengthening now, as the next four to five years will see a large number of people complete their terms, said Parekh.

“With a large number of people retiring, and with few people joining the workforce, the per-employee efficiency and per-employee business numbers have started increasing.”The headcount at state-owned banks declined for six consecutive years before increasing in 2024-25. In FY25, PSU banks employed 757,641 people compared with 756,015 in the previous year.