Highest Job Potential by Private Sector Banks-VRK100-26Sep2020

Highest Job Potential by Private Sector Banks-VRK100-26Sep2020

Follow @vrk100

One of the biggest myths in India is public sector companies provide more jobs as compared to the private sector until you look at the hard data. Politicians and other vested interests tend to reinforce this stereotype.

 

Data always surprise us. When you start looking at the data, the false image begins to evaporate. For example, private sector banks (PVBs) provide more jobs versus public sector banks (PSBs).

 

In the last five years, PSB staff strength fell by 0.3 per cent between 2013-14 and 2018-19, while that of PVBs surged by 59 per cent and total bank staff rose by 22 per cent, as per latest data available from Reserve Bank of India (RBI).

 

Between this five-year period, total bank staff strength increased by 22 per cent to 13,05,000. This total is inclusive of public sector, private sector, foreign, cooperative and small finance banks. In the same period, PSB staff strength declined by 0.3 per cent to 6,84,000, and their share in total bank staff fell from 64 per cent in March 2014 to 52.4 per cent in March 2019.

 

In this period, how did private sector banks fare? Their staff strength has gone up by 59 per cent to 4,67,000, and their share in total bank staff increased from 27.4 per cent to 35.7 per cent.  

 

The growth rates for other banks (foreign, cooperative and small finance banks) can be seen in the below table.

 

However, it is fair to argue that public sector banks have a lot of legacy issues to deal with. To come out of this, PSBs have been trying to reduce their staff strength through the process of natural superannuation and voluntary retirement.

 

It is worthwhile to mention that private sector banks have been taking more of the market share and it is mostly coming at the expense of public sector banks, who are saddled with high percentage of bad loans. As a result, PSBs are unable to grow their business and have been losing out to PVBs.

 

It may be noted that the bank staff numbers provided in the below table include those of officers and clerks; but exclude subordinate staff--as it is not fair to compare the subordinate staff (a legacy for PSBs) from a productivity viewpoint.

 

As per RBI press release dated 14 March 2019, IDBI Bank ceased to be a public sector bank and it became a private sector bank after LIC of India acquired a majority stake in the bank.

 

Table: Bank-wise distribution of staff (please click on it for larger image) >

 

 - - -

References:

RBI Handbook of Statistics on Indian Economy 18Sep2020

Bank-wise Distribution of Staff

Disclosure:  I've vested interested in Indian stocks. It's safe to assume I've interest in the stocks discussed, if any.

Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets. He blogs at:

http://ramakrishnavadlamudi.blogspot.com

http://scribd.com/vrk100

 

Twitter @vrk100