It is not that poor quality students are appearing in IBPS exam but there are other reasons behind this. Some reasons for the less no. of participation of the banks are that there are some banks which conduct their own recruitment process or conduct one-year training associated with Manipal, Amity universities or other institutes.
The other reason might be the merger of the banks. Recently five banks were merged with the SBI bank which becomes the largest bank in India and some other banks also planning for the merger.
Although the no. of participating banks will be less, there will be vacancy every year like
IBPS PO, IBPS Clerk, IBPS SO and RRB officer posts as per the internal sources.
One major reason behind the less no. of opportunities is the digitization. In this digital era, government and banks are focusing on the digitization of all the work. In this process, less no. of the work force is required which generate less vacancy in the banks.
One article I had been through will help you to know the answer clearly:
http://indianexpress.com/article/jobs/ibps-po-and-clerks-2017-know-why-number-of-vacancies-decline-4835752/