Skip to main content

NBFCs Back in Business of Hiring

Non-banking finance companies (NBFCs) are beginning to add crucial jobs across various functions, indicating that stability has returned to a key sector that was unsettled last autumn by a liquidity squeeze and subsequent increases in capital costs. NBFCs could hire about 15,000 people in FY20, an estimate by recruitment firm TeamLease showed. Among those adding jobs are Mahindra Finance, Shriram Transport Finance, Piramal Capital, Aditya Birla Finance, IIFL, Magma FinCorp, and Ugro Capital.
These companies have already begun recruitments, and the Jan-March quarter alone could account for half the expansion in FY19, which ends in 10 days. According to TeamLease, NBFCs have hired around 10,000 employees in FY19. Sector Overcomes IL&FS Setback
“The (NBFC) sector is poised for the next level of growth in next few years and well-run NBFCs would benefit the most (from this expansion),” said Ramesh Iyer, managing director at Mahindra Finance. “We are also expanding and diversifying into new products, such as shortterm consumer durable credit and education loans.” Mahindra’s non-banking unit has 30 lakh customers. In FY20, the company might appoint about 1,000 people as it adds 75-100 branches.“The situation was challenging, but there is opportunity in every challenge,” said Rakesh Singh, CEO, Aditya Birla Finance. “As far as we are concerned,…our robust asset-liability and NPA management meant we were less affected by these challenges.”
These new jobs are across functions that include sales, collections and credit assessment, underscoring that financing has returned to a sector that faced a liquidity lockdown in the aftermath of the IL&FS payment defaults. Underwriters (who assess borrowers’ repayment ability) and risk management professionals are in demand. “Hiring will gain momentum next financial year, with 40-50% rise in employee counts,” said Sabyasachi Chakraverty, head — banking & finance, Team-Lease Services. Separately, housing finance companies are switching increasingly to retail lending, while other NBFCs are adding manpower to functions that oversee advances to infrastructure and logistics.
“We are expanding in Tier-3 cities and even smaller locations, focusing on meeting the financial needs of the under-served,” said Sumit Bali, CEO, IIFL Finance. “In the next six-nine months, we would be adding more than 3,000 employees to our workforce.” New digital finance models such as peer-to-peer (P2P) lending and fintech are leading to roles in functions such as data science and product development. “Most of the other large NBFCs have gone slow on their mortgage lending business: We leveraged this opportunity in our retail operations and housing finance business,” Piramal Capital & Housing Finance said in an email response. “We will continue to recruit… as we expand our housing finance presence in Nagpur, Vadodara, Surat, Indore and Jaipur, along with a few branches in Mumbai as well.”
Piramal Capital’s employee strength has increased to more than 1,200 from 600 in FY18. Similarly, Shriram Transport Finance would recruit 2,000 people in FY20, aiming to expand about 18%. “The growth rate would be slower in the first two quarters but would pick up strongly during the last two,” said Umesh Revankar, managing director, Shriram Transport Finance.
The Economic Times, 22nd March 2019


Popular posts from this blog

SC order on RBI circular: More options for banks to tackle defaulting firms

Lenders also have the option of restructuring the loans Lenders to companies which are under stress could now have three options to deal with them if they default on loans: take a haircut as part of a one-time settlement, restructure the loans for a longer tenure as they did when corporate debt restructuring schemes were allowed, or go to the Insolvency and Bankruptcy Code (IBC) for redress. These changes in the options available to lenders come, according to PE funds and bank lawyers who are involved in the IBC process, in the wake of the Supreme Court on Tuesday setting aside the 12 February RBI circular, which allowed a 180-day window to banks to resolve a company default.But they can still find a resolution. According to a Reserve Bank of India circular, a loan becomes a non-performing asset when banks cannot find a way of recovering their money in 90 days. In short, banks still have a window to resolve the default. Lenders can take a haircut as part of a one -time settlement of du…

April GST collections at new high despite rate rationalisation in December

Goods and services tax (GST) collection touched a record high in April, exceeding Rs 1 trillion for the third time in four months. The mop-up was 10 per cent higher over the previous year. Gross collection for the month was Rs 1.13 trillion, said the finance ministry. Despite the recent rate rationalisation in December, a rise in collection was reported. Of the total collected, the CGST (central GST) contributed Rs 21,163 crore, the SGST (state GST) Rs 28,801 crore, the IGST (integrated GST) Rs 54,733 crore (including Rs 23,289 crore on import) and cess Rs 9,168 crore (including Rs 1,053 crore on import). After settlement of the IGST and the balance IGST in a 50:50 ratio between the Centre and states on a provisional basis, the CGST stood at Rs 47,533 crore and SGST at Rs 50,776 crore. The CGST target in the Union Budget for 2019-20 is Rs 6.1 trillion. “The April collection indicates the tax base is increasing gradually, with GST getting stabilised with measures such as e-way bills and…

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…