PSU banks gain productivity edge, outpace private peers

Median profit per employee at PSU banks rose to ₹19.6 lakh, against ₹14.5 lakh at private banks

- Shayan Ghosh & Devina Sengupta

Employees at India's state-owned banks are becoming more productive than private sector peers, shows the regulator's data. Those tracking the sector attributed it to three factors: lack of hiring by public lenders over the years, improvement in their work culture, and a push by the government to make them more productive.

The median profit generated by a public sector bank employee was ₹19.6 lakh in FY25 compared to ₹14.5 lakh for a private bank employee, according to data released by the Reserve Bank of India (RBI) on 29 December. The gap has widened since FY24, when the per-employee profit of government-owned banks stood at ₹15.2 lakh, surpassing ₹14 lakh for their private peers.

Profit per employee is a key metric that tracks staff productivity.

India's public sector banks had an image of being inefficient, with governments continually injecting fresh capital into them each year. In 2019, the Centre decided to merge 10 public sector banks into four, a move aimed at consolidating the sector into stronger and larger lenders.