Rural banks face high attrition rate because of the low salary and perks as compared to state-owned banks.
Regional rural banks (RRBs) are going to hire about 15500 employees for various positions this year, making the hiring comparatively more than last year.
The increase in hiring by RRBs is to help the government agenda of providing banking services to the remotest of rural areas, and including the people in these areas in the financial system of the country.
Currently, there are 56 rural banks operating in our country with a total employee strength of 86,555 as of March 2017. These banks have done a cumulative business of over rupees six lakh crore in 2016–17, which is a growth of 15 per cent from the previous period.
One issue with these rural banks is the high attrition rate of staff. The employees tend to quit these bank jobs early because of the low salary and perks as compared to state-owned banks. There are cases where the staff doesn’t report or even turn up for work.
Sayeed Khan, the secretary general of the All India Regional Rural Bank Employees Association said that large-scale hiring is required in RRBs to meet the growing needs of massive branch expansion, address challenges of financial inclusion and to overcome the loss of manpower due to retirement and high attrition.
He further said that the attrition rate is higher in states, such as Andhra Pradesh, where banking penetration is better than in many other states. The reason was lack of parity in benefits and allowances with state-run bank employees. On the other hand, the attrition in RRBs is the lowest in the northeastern states, where the opportunities are fewer.
While RRBs will hire more, the hiring figures for the state-owned banks are not encouraging, as these will hire less this year. The reason for this is the issue of NPAs, which has led to financial stress for these state-owned banks. Also, the recent merger of SBI and its associate banks has led to excess of about 15000 employees in the bank. So, hiring by SBI will obviously be low this year.
But again, seeing the slowdown in the job market, particularly in the IT sector, there may be more applications in the banking sector, and also more hiring by banks.
The Institute of Banking Personnel Selection conducts the recruitment for these RRBs.
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