Informist, Thursday, Sep 19, 2024

By Apoorva Choubey and Anjana Therese Antony

MUMBAI – Hiring in India's banking and financial services industry has slowed down due to tighter regulations by the Reserve Bank of India on lending and card sales, according to Guruprasad Srinivasan, executive director and group chief executive officer of Quess Corp Ltd. "BFSI has gone a bit slow due to regulators coming down hard on few sales points, specifically for cards," he told Informist in an interaction.

Over the last few months, the RBI has not only tightened rules related to unsecured loans provisions, project finance and deposit-taking housing finance companies, but also continued to crack the whip on several financial companies and barred them from offering one or more services. The companies that have been pulled up by the RBI include the likes of Bajaj Finance Ltd, Paytm Payments Bank and JM Financial Products Ltd.

While the regulator's move is directed at enhancing the operational resilience of the banking system and preventing stress on lenders' books, ratings agencies expect stricter rules to limit credit growth in India in 2024-25, as some lenders could turn cautious. The RBI's decision to raise risk weights on unsecured personal loans and credit cards may also constrain growth, according to analysts.

For Quess Corp, banking and financial services, or BFSI, is the largest vertical, with a headcount of 120,000, compared with the company's total count of over 600,000. The BFSI vertical saw weakness in staffing in Apr-Jun, after being healthy in previous two quarters, Srinivasan said. He expects the sector to recover from Oct-Dec onwards, as penetration deepens and digital payments continue growth momentum.

On an overall basis too, hiring is slower than usual, for Quess Corp, which is a global leader in workforce management solutions. "We understand the market is a bit slow... at this point, we should have been crossing at least 50,000 mandates (in the current year) but we are in a range of about 35,000-40,000 open mandates," Srinivasan said.

Sectors seeing weakness in hiring include pharmaceuticals, healthcare, IT services, manufacturing and telecom. "There is no dearth for entry-level jobs but roles for which the cost of acquisition has gone up, but the productivity remains the same are seeing challenges," he said.

The overall staffing or workforce management division, accounts for nearly 50% of the consolidated earnings before interest, tax, depreciation and amortisation of the company. For Apr-Jun, the EBITDA for the division was 890 mln rupees while Quess Corp's consolidated operating profit was 1.84 bln rupees, up 19% on year.

Of the workforce segment's operating profit, 50% comes from general staffing business which is purely in India, Kamal Pal Hoda, chief financial officer, said. The remaining 50% is split between IT staffing in India and overseas, Hoda added.

At 1156 IST, shares of Quess Corp were 2.9% lower at 816.50 rupees on the National Stock Exchange. It has risen 15% in 30 days and 85% in 52 weeks. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Vidhi Verma

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