Kolkata: Banks and financial services is one of the sectors which is most vulnerable to AI assaults on employee strength. The impact of AI and technology
on employee numbers in private banks is now being felt in India. The country’s top 10 private banks have reduced their total number of employees by 10,114 in FY26. In FY25, these banks reduced their staff by 9,637. In contrast, in fiscal year 2024, these banks hired 83,645 employees. Banks are now increasing their use of automation and AI to accomplish more with fewer employees. Despite declining employee numbers, large private banks are expanding their business and branch network. The four major banks collectively added approximately 1,289 new branches and business centers in FY26. This reflects a shift in the banking sector’s work environment. Previously, the number of employees increased rapidly with the expansion of branches. Now, with the help of technology, banks are trying to handle more customers and branches with fewer employees.
AI impact in top 10 private banks
According to media reports, the total number of employees at the country’s top 10 private banks fell to 7,39,452 at the end of FY26. It stood at 759,203 two years ago. In other words, there has been a 2.6% shrinkage in employee numbers in the past two years. The banks in this list are HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra Bank, IndusInd Bank, Yes Bank, Federal Bank, IDFC First Bank, Bandhan Bank and RBL Bank.
Big banks axed more
The four major private sector banks saw the largest reductions in employee numbers. These are HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank. They shed as many as 14,364 employees in FY26. ICICI Bank reduced its workforce by 6,633, HDFC Bank reduced its workforce by 3,346, Axis Bank by 3,116 and Kotak Mahindra Bank by 1,269.
More employees in mid-sized banks
However, not all private banks have reduced employee numbers. Some mid-sized banks increased staff strength in FY26. Among these are Federal Bank, IndusInd Bank, IDFC First Bank and Yes Bank. While Federal Bank added 1,570 employees, IndusInd Bank added 1,491 employees and Yes Bank increased employees by 904. IDFC First Bank added 869 employees and Bandhan Bank added 365. RBL Bank reduced 949 employees.
Pace of recruitment slows down
Not only has the total number of employees declined at large banks, but also has the pace of new recruitment slowed. HDFC Bank hired 45,902 employees in FY26 compared to 89,115 in FY24. Similarly, Kotak Mahindra Bank’s permanent hires stood at 18,927, down from 31,686 in FY23. This suggests that banks are now placing more emphasis on hiring based on needs rather than staffing.
AI helps productivity
The use of AI and automation is rapidly increasing in Indian banks. Axis Bank’s AI-based employee assistant is assisting over 84,000 employees. It is resolving over 81% of branch-related queries. According to the bank, it has increased productivity by over 10% in some customer services. ICICI Bank has deployed over 100 autonomous bots. Federal Bank has automated over 385 processes.
