Recruitment surge: Public sector banks to hire 50,000 staff in FY26 amid expansion plans; monetisation of subsidiaries on cards
Public sector banks (PSBs) are set to recruit around 50,000 personnel in the ongoing financial year, with nearly 21,000 officer-level appointments, as lenders look to expand operations and boost customer services.
The bulk of the recruitment drive will be led by the State Bank of India (SBI), which plans to onboard close to 20,000 individuals, including specialised officers, according to data compiled from various banks, as per news agency PTI.
SBI, the country's largest lender, has already hired 505 probationary officers and 13,455 junior associates to strengthen its branch operations across 35 states and Union Territories.
As of March 2025, SBI's workforce stood at 2,36,226, including 1,15,066 officers. The bank continues to maintain an attrition rate of under 2 per cent, reflecting its strong employee engagement and welfare practices.
The average hiring cost per full-time employee during 2024–25 was Rs 40,440.59.
Punjab National Bank (PNB), the second-largest state-run lender, plans to increase its headcount by over 5,500 this fiscal.
As of March 2025, PNB had a staff strength of 1,02,746.
Meanwhile, Central Bank of India aims to recruit nearly 4,000 employees during the year.
Apart from workforce expansion, the finance ministry has urged PSBs to look at monetising their investments in subsidiaries and joint ventures by listing them on stock exchanges once operations are scaled up.
Sources cited by PTI say that around 15 such subsidiaries and JVs are being considered for initial public offerings or divestment in the medium to long term.
To prepare for this, banks have been advised to strengthen governance, improve operational efficiency and ensure professional decision-making in their subsidiaries. 'Banks can look at unlocking value at an opportune time,' said an official, noting that wherever necessary, PSBs may invest in these subsidiaries to support growth.
While hiring and expansion are underway, the banking sector faces short-term challenges.
According to a recent report by Motilal Oswal, net interest margins (NIMs) are expected to come under pressure in the first half of FY26 due to a fall in benchmark interest rates, which could compress lending yields. Despite banks adjusting savings and term deposit rates, a lag in funding cost alignment is likely to affect profitability in H1.
As per ANI, the report anticipates a recovery in the second half of FY26, supported by a phased reduction in deposit rates and a 100-basis-point cut in the Cash Reserve Ratio (CRR) from September, which would enhance liquidity. While Net Interest Income (NII) growth is expected to remain muted at 1.7 per cent year-on-year in Q1, public sector banks may see Profit After Tax (PAT) grow by 4.8 per cent YoY, although down 11.7 per cent on a quarterly basis.
Overall, despite near-term margin pressures, the sector is projected to grow at a healthy compound annual growth rate (CAGR) of 11.1 per cent in earnings between FY25 and FY27.
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