Microfinance firms step up hiring ahead of small banks launch

15,000 people across levels likely to be hired over the next one year, particularly in rural and semi-urban areas


In September 2015, Reserve Bank of India gave in-principle approval to 10 microfinance firms to start small finance banks. Photo: Bloomberg
In September 2015, Reserve Bank of India gave in-principle approval to 10 microfinance firms to start small finance banks. Photo: Bloomberg

Mumbai: Microfinance entities, some of whom are gearing up to launch small finance banks, are on a hiring spree with plans to recruit as many as 15,000 people in the next one year, particularly in semi-urban and rural areas.

In September, Reserve Bank of India (RBI) gave in-principle approval to start small finance banks to 10 microfinance firms, including Ujjivan Financial Services Pvt. Ltd, Janalakshmi Financial Services Pvt. Ltd and Equitas Holdings Ltd.

The central bank has granted them 18 months to complete the transition.

With plans to convert most of the existing branches to bank branches and open new ones within this year, these entities are aggressively adding to their staff and putting in place leadership teams.

Most of them are currently on the lookout for former bankers, retired RBI officials and senior banking officials both from the private and public sector banks or financial institutions. Bulk hiring for junior and mid-level positions is likely to start by the second half of this year, according to company officials and hiring agencies.

“In next 12 months, we expect to see a demand of anywhere between 12,000 and 15,000 people, just from small banks. These people are only for the initial stage of building their sales force, distribution and setting up their branches,” said Ajay Shah, assistant vice-president (banking and financial services) at TeamLease Services Pvt. Ltd, a recruitment agency.

TeamLease, for instance, has received mandate to hire nearly 1,200 people each for Janalakshmi Financial Services and Equitas Holdings within the next one year, for senior as well as mid-management roles.

In the first phase, a significant number of them will be hired from south India where most of their branches are located.

A senior executive with Equitas Holdings, on the condition of anonymity, said that the entity will need about 3,000 additional people, primarily for its branch network, in the next two years.

Equtias Holdings’s head of human resources (HR) S. Muralidharan declined to comment on hiring plans.

Similarly, Janalakshmi Financial Services said it would need a total of 2,000 people to open its small banks. “We have been proactively hiring, both for our ongoing expansion plans and the migration, and a large part of our senior management team is in place. Recruitment for other positions is in progress,” said V.S. Radhakrishna,managing director and chief executive of Janalakshmi financial Services.

The Chennai-based microfinance firm plans to start banking operations by the second half of this year. It expects to commence with more than 200 branches in tier II and tier III cities initially.

The Bengaluru-based Ujjivan, which expects to start operations of its small bank by 2017, is currently focused on building its leadership team.

“We have started hiring some key management people. We already have a few now, and we will hire more in the next 2-3 months. We need someone who will be heading the retail deposits business, a head of risks and complaints because regulatory compliance is a big issue once we become a bank,” said a senior company official, who did not want to be identified.

An additional 2,500 people would be required to run its small finance banks, the official said, taking its total headcount to around 10,500 in the next couple of years.

Similarly, Ahmedabad-based Disha Microfin Pvt. Ltd, which also got an in-principle licence to open a small bank, is planning to recruit around 1,000 people in the next one year. It is currently focused on bringing in people specialized in areas such as liabilities and compliance into the firm. “Right now our focus has been to hire middle management and fill the gaps in the senior level. And closer to the launch date, we will hire people for specific branch locations in semi-urban and rural areas,” said Rajeev Yadav, group chief executive officer of Fincare Business Services Pvt. Ltd, the parent firm of Disha Microfin.

As per RBI guidelines, small finance banks will offer basic banking services, accept deposits and lend to unserved and underserved sections, including small business units, small and marginal farmers, micro and small industries, and entities in the unorganized sector.

Swaraj Singh Dhanjal contributed to this story.

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