Private sector banks have seen around 25% increase in layoffs.
Select private sector banks and small finance banks have higher employee turnover rates.
According to the latest report on Banking Trends and Developments in India 2023-24, employee attrition in private sector banks has increased to around 25%, posing significant operational risks.
High attrition rate for private and small finance banks
Select private sector banks and small finance banks (SFBs) have high employee turnover rates, said the report, released by the Reserve Bank of India.RBI) said.
Increasing attractiveness despite growing workforce
The total number of employees of private banks is expected to exceed that of public sector banks (PSBs) during 2023-24, but their employment has grown sharply over the past three years, with attrition rates of around 25 per cent on average. has gone
Disruption risks operational performance
“High attrition and employee turnover rates pose significant operational risks, including disruption of customer services, besides loss of institutional information and increased recruitment costs. In various discussions with banks, the Reserve Bank has has emphasized that reducing attrition is not just a human resource function but a strategic imperative,” he said.
Strategies to reduce employee turnover
It said banks should provide better onboarding procedures, extensive training and career development opportunities, mentorship programs, competitive advantages, and a supportive workplace culture to promote long-term employee engagement. Such strategies need to be implemented.
RBI demanded review of gold loan policy.
In view of several irregularities in disbursement of loans against gold jewelery and jewellery, including top-up loans, the Reserve Bank advised the supervisory bodies to comprehensively review their policies, procedures and procedures on gold loans. Review to identify gaps and initiate appropriate remedial actions at a time. binding method.
Better monitoring of gold loan portfolios
It said supervised institutions were advised to closely monitor their gold loan portfolio and ensure adequate controls over outsourced activities and third party service providers.
Climate change risks affect financial stability.
The report states that climate change risks affect the profitability of financial institutions, growth prospects, and inflation dynamics and Thus affecting financial stability and price stability.
Strengthening regulations for climate risk management
It added that to promote the assessment of these concerns by regulated entities, the regulatory and supervisory framework should include better risk management guidelines, disclosure requirements, periodic stress testing, and reasonable assurance and assurance. The functions of the need to be strengthened with determination.
(with PTI input)