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SBI's ₹25,000 Cr Share Sale Sparks Privatisation Fears Amid One Lakh Vacancies
Despite massive staff shortage and outsourcing in SBI, the ₹25,000 crore share sale fuels fears of slow, strategic privatisation.
Author: Neha Bodke
Published: 6 hours ago
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As India’s largest public sector bank, State Bank of India (SBI), gears up to raise ₹25,000 crore through Qualified Institutional Placement (QIP), serious concerns are being raised by bank unions, policy observers, and insiders. The move, while officially meant to boost capital, is widely viewed as a step toward phased privatisation, especially amid crippling staff shortages and widening reliance on outsourcing.
According to a Right to Information (RTI) reply dated 13 May 2025, over 1.2 lakh positions have fallen vacant in SBI in recent years across officers, clerks, and sub-staff categories. However, there has been no proportionate recruitment to fill the gap. The bank’s branch network and workload continue to expand, but the workforce is shrinking.
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This concern was echoed strongly in a detailed representation by the United Forum of Bank Unions (UFBU) to the Finance Ministry in March 2025. It noted that while SBI and other PSBs account for over 60% of market share and run 90,000+ branches, they are staffed at levels significantly lower than their private counterparts. The average customer-to-employee ratio in PSBs now exceeds 2000:1, compared to 300:1 in private banks.
"Public sector bank employees are facing burnout, rising stress, and even mental health crises due to unmanageable workloads,” the UFBU stated in the letter. “This is not just a human issue,it impacts service quality and customer trust.”
Simultaneously, core banking roles such as document handling, cash movement, and housekeeping are being outsourced to temporary daily-wage workers. These employees often lack banking experience and operate without basic job security or accountability. Unions call this model a “privatisation by stealth”, where permanent posts are bypassed and critical work is handled off-roll.
“This is a clear and calculated attempt to privatise SBI in phases. Public sector banks act as a protective shield for the Indian economy, selling them off will shrink financial access for the common people,” said Saji Varghese, Vice President of the Bank Employees Federation of India (BEFI) and a coordinator for SBI employees within the federation to Kanal.
The timing of the ₹25,000 crore share sale has further alarmed employees. Media reports indicate that the government’s shareholding, already reduced to 56.92% in 2017, could fall below 55% with this round bringing it closer to the privatisation threshold. This contradicts earlier parliamentary assurances that public control over SBI would remain intact.
The unions argue that public sector banks like SBI serve as pillars of financial inclusion, delivering over 80% of welfare-linked schemes such as Jan Dhan, Mudra, and PM-Kisan. They warn that as corporate ownership increases, these services will shrink, and banking will shift towards profit-driven, elite-focused models.
Despite consistent pleas for recruitment drives, regularisation of temporary staff, and an end to outsourcing, the Finance Ministry has yet to act. The result, employees say, is a system being deliberately overburdened, fragmented, and devalued, laying the groundwork for privatisation.
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