Private Banks Slow Hiring in FY25 Despite Branch Expansion

India’s top private banks, HDFC Bank and ICICI Bank, significantly slowed down hiring in FY25, even as they expanded branch networks, reflecting a shift toward productivity enhancement and tech-driven efficiency.

Key Reasons for Hiring Slowdown

According to Suresh Ganapathy, Head of Financial Services Research, Macquarie Capital:

• Productivity and efficiency improvements have reduced manpower requirements.
• Non-replacement of resigning employees as a cost-saving measure.
• Increased use of AI and technology to drive growth:
  • ICICI Bank has doubled tech expenses as a share of operational spend (from 5% to 10.5%) over 5 years.
  • Absolute tech spending has risen 4x in the same period.

State-Owned Banks: Similar or Different?

• SBI’s workforce has been shrinking steadily:
  • FY20: 249,448 employees
  • FY24: 232,296 employees
  • Net loss: 17,152 employees over 5 years
• RBI data suggests that while private banks’ workforce has grown 2.78x over a decade, overall hiring has now plateaued.

Outlook

• The slowdown in hiring at HDFC Bank and ICICI Bank may indicate a larger structural shift in India’s banking sector.
• As automation, AI, and digital banking scale, the need for large frontline teams may be diminishing.
• Analysts are closely watching Axis Bank, SBI, and other major lenders’ Q4FY25 results to assess whether this trend will extend sector-wide.

BS