India’s banks have been scaling up investments behind new technologies, digital infrastructure and now even artificial intelligence (AI) is beginning to make inroads as they look to streamline processes, enhance customer outreach and strengthen cyber security.
Improving productivity aided by new technology, coupled with the normal attrition may be beginning to have some bearing on headcounts at major lenders.
ICICI Bank’s permanent workforce reduced by 5,148 employees in the financial year 2026. The country’s second largest private sector lender had 1,24,029 permanent employees, in as on March 31, 2026, according to its annual report. As on March 31, 2025, the permanent employee count had stood at 1,29,177.
ICICI Bank’s total number of employees have also come down by around 6,633 to 1,24,324 in FY26, from 1,30,957 employees a year earlier, the annual report shows. The lender did not specify the reasons behind this decline. But, it mentions that the employee base includes sales executives, employees on fixed term contracts and interns.
ICICI Bank is not alone. At its larger rival HDFC Bank, the workforce reduced 3,343 employees to 2,11,178 employees at the end of FY26, compared with 2,14,521 employees, a year earlier. Its non-supervisory staff strength declined by over 8,000 employees to 1,62,797 from 1,70,950. On the other hand, its workforce increased across junior, middle and senior management levels.
Axis Bank, the third largest private sector lender reported total employee count of over 1.01 lakh in the financial year ended March 2026 in its annual report, compared with 1,04,453 in the previous year ended March 2025.
New technology alone may not be the reason behind the decline in jobs at banks. The normal attrition that happens annually, may also be at play here. Bankers say as productivity increases with new technology, some of the positions may not be necessarily filled back.
“We have an attrition of about 18-20%. As we get more productive and efficient, we just don’t backfill the attrition. So, there is no layoff happening here,” Subrat Mohanty, executive director of Axis Bank told reporters in the post quarterly earnings call on Saturday, July 18.
What was being seen currently was the continued investment that the bank has made in technology in terms of productivity enhancements coming through largely and not really AI, he said.
HDFC Bank officials pointed that the lender had an attrition rate of around 20%, and sometimes there may just be a little more time that may be needed to fill certain positions, so it may just be a temporary timing difference. Also, sometime if the attrition rate is high, the bank may take a call whether there was a need for those positions at lower levels.
“We will be ensuring that we don’t ask anyone to go, and that is something that I continue to state and every leadership member continues to state, other than non-performance,” Sasjidhar Jagdishan, the MD and CEO of HDFC Bank said in the bank’s first quarter earnings call.
HDFC Bank had said in its annual report that the focus was on enabling its people to work more productively, and with greater alignment to customer needs leveraging technology. The lender is also redeploying talent from backend functions, where it is able to bring technology-led efficiencies, to customer-facing roles.
A growing share of payments, onboarding, servicing, and lending is digitally enabled and supported by analytics and automation, according to HDFC Bank. Emerging technologies, including AI led tools, have the potential to further enhance service quality, efficiency and turnaround times, it said.
“What we are endeavouring is how do we use and leverage technology and retrain some of those people at the back-end to move to the front-end, or to technology teams, is going to be the medium to long-term strategy,” Jagdishan said on the call.
AI and GenAI promises transformational capabilities, according to a report by the Boston Consulting Group in 2025.
“With mature deployment, 35-40 per cent of current low value activities can be automated. To capture this potential, banks must move beyond pilots. This means having a clear AI/ GenAI strategy, investing in modular architecture, setting up governance frameworks for ethical AI, and reskilling staff,” BCG said in the report.
