Public sector banks (PSBs) in India are planning to hire around 50,000 new employees in the financial year 2025–26 (FY26). This includes nearly 21,000 officer-level positions as banks aim to grow their operations and improve customer services.
SBI Leading the Recruitment Drive
The State Bank of India (SBI) will lead this hiring push, aiming to add about 20,000 employees, including many specialist officers.
So far, SBI has already hired 505 probationary officers and 13,455 junior associates to support its branches across 35 states and Union Territories.
As of March 2025, SBI had 2.36 lakh employees, including 1.15 lakh officers, and its employee turnover rate is less than 2%, showing strong staff satisfaction.
The average cost of hiring each full-time employee during 2024–25 was about ₹40,440 per month.
Other Banks Expanding Too
- Punjab National Bank (PNB) plans to add 5,500+ staff this year.
- Central Bank of India plans to recruit around 4,000 people in FY26.
Government Focuses on Monetising Subsidiaries
Besides hiring, the Finance Ministry has asked public sector banks to consider listing their subsidiaries or joint ventures on the stock market. This will help banks raise money and unlock value.
About 15 such subsidiaries may go for IPOs or stake sales in the medium to long term.
To make this happen, banks have been asked to:
- Improve corporate governance
- Enhance operational efficiency
- Ensure professional decision-making
They may also invest more in their subsidiaries to help them grow before going public.
Sector Faces Short-Term Challenges
While the sector is growing, there are some short-term difficulties. A report by Motilal Oswal says that banks may earn less interest income in the first half of FY26 because of falling interest rates, which may reduce lending profits.
Even though banks have changed interest rates on deposits and savings, there’s a delay in adjusting their costs, which could affect profits in the short term.
However, the situation is expected to improve in the second half of FY26, thanks to:
- A likely 100 basis point cut in the Cash Reserve Ratio (CRR)
- Lower deposit rates, which could improve liquidity and margins
Growth Outlook
Even with some short-term profit pressure, the long-term outlook is strong.
- Net Interest Income (NII) growth may be low at 1.7% year-on-year in Q1
- Profit After Tax (PAT) for PSBs may rise 4.8% YoY, though it might fall 11.7% from the previous quarter
Overall, public sector banks are expected to grow their earnings at a healthy 11.1% compound annual growth rate (CAGR) between FY25 and FY27.
