The average public sector bank employee is better off than his private sector counterpart. Staff cost per employee in a public sector bank is 150 per cent higher than similar costs in private banks.  According to the data provided by the RBI, costs per employee in a public sector bank in 2010-11 were at Rs 7.15 lakh wheras it was Rs 5.63 lakh for a private sector.

In a speech delivered recently at a conference of public sector HR managers, the RBI Deputy Governor Dr K.C.Chakraborty, said, "One thing is, thus, loud and clear – the competitive advantage in terms of staff costs that we always thought the Public Sector Banks had is no longer there. The absence of the cost advantage coupled with the problem of lower productivity, underscore the critical need for urgent HR transformation in Public Sector Banks."

He also mentioned that per employee expenses in a public sector bank were higher despite their pension expenses not being full reflected. Calling for immediate attention to the problem, he said, HR transformation would determine their ability to compete.