New Delhi: The finance ministry has flagged rising attrition at regional rural banks (RRBs), with newly recruited staff quitting at rates that hit 39.2% for clerical employees and 35.5% for officers in recent years, according to government data reviewed by Mint.
At the Nagaland Rural Bank, every officer hired to fill a new vacancy left the job, resulting in the highest recorded attrition rate among RRBs. Maharashtra Gramin Bank, Jammu & Kashmir Gramin Bank, Manipur Rural Bank and Odisha Gramin Bank have also seen rates above 45%.
The exits have been concentrated among recent hires, with overall attrition across RRBs remaining a modest 3-6% for clerks and 2-3% for officers, but attrition measured against new joiners has climbed steadily, from 23.1% in 2023 to 39.2% in 2025 for clerical staff.
Government officials are examining ways to encourage RRB retention. Economists and bank union officials attribute the trend to better career alternatives, including Union and state government jobs, and to a recruitment calendar that historically saw RRB hiring conclude before nationalised banks and State Bank of India (SBI) completed their own selections.
- New-hire clerical departures hit 39.2% across rural banks in 2025.
- Nagaland Rural Bank lost 100% of its newly hired officer intake.
- Flawed hiring schedules forced recruits to use rural banks as stop-gaps.
- Severe promotion delays across 21 banks further worsened staff retention rates.
- Experts urge retention bonuses and faster promotions to curb early exits.
Queries emailed to the National Bank for Agriculture and Rural Development (Nabard), finance ministry, Reserve Bank of India (RBI) and sponsor banks, did not receive a response till going to the press.
RRBs had 6,299 clerical vacancies in 2023, against which 4,384 employees joined, while in 2025 vacancies increased further to 8,034, even as only 4,937 employees joined, according to a presentation from the government.
Officer vacancies across Scale I, II and III stood at 3,659 in 2023, and 5,685 in 2025, while the number of employees joining stood at 3,160, and 4,503, respectively.
In RRBs, Officer Scale I is the entry-level Assistant Manager/junior-management grade, Scale II is the Manager/middle-management grade, and Scale III is the Senior Manager/middle-management grade.
Data for 2026 is yet to be published in both categories.
Regional extremes, delayed internal mobility
The presentation noted that 17 RRBs were yet to start promotions and four were yet to complete the promotion process.
Dr Charan Singh, chief executive officer (CEO) and founder director of EGROW Foundation, said the situation highlights a paradox in the labour market, with young employees having alternative opportunities despite concerns over unemployment.
“This is a very unique situation. On one hand, some pundits say there is very high unemployment in the country. On the other hand, as you can see from the data, in good jobs, young people do not want to stay,” Singh said.
“What does that mean? It means that there are alternatives available in the country. Given the rural background, the quality of work, and the salary, young and new recruits are exploring better avenues, and why not? The issue is that the country is offering alternative opportunities to the youth. That is precisely the cause of high attrition at every level in almost all RRBs. The salary structure, the working conditions, and the location are all important parameters to retain the newly recruited workers,” he said.
He suggested additional increments for employees completing six months or a year, faster promotion opportunities after probation and greater investment in training and professional development.
“If the staff has stayed for six months or more, there are some increments. If they have stayed for a year or more, there are more increments. If the probation is complete, the promotion chances have to be advanced,” Singh said.
Union points to recruitment timing
Unions point in the direction of the recruitment timeline. Rupam Roy, general secretary, All India Bank Officers’ Confederation (AIBOC), attributed a significant part of the RRB attrition problem to the sequencing of recruitment processes, saying candidates had earlier joined RRBs as a stop-gap arrangement before moving to nationalised banks or the State Bank of India when selected.
“RRB attrition is largely a consequence of the recruitment calendar; RRB recruitments concluded before those of nationalised banks and SBI, so candidates joined RRBs as a stop-gap and left upon selection elsewhere. UFBU (United Forum of Bank Unions) consistently raised this anomaly, and the sequencing has now been reversed, which will certainly improve retention,” Roy said.
He said the issue now extends beyond RRBs, with selected candidates also not joining scheduled commercial banks, leaving vacancies unfilled.