Despite RBI warning, Banks in India are focusing on Credit Card and Personal Loans

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According to staffing services companies and executives from the banking and financial services sector, there has been an increase in demand for manpower to sell credit cards and loans, despite the Reserve Bank of India’s stricture on unsecured loans and the tapering off of growth momentum in personal loans in February.

Estimates from Quess Corp and Teamlease Services, two of the largest providers of temporary staff to the sector, show that staffing mandates in frontline sales jobs from BFSI (Banking, Financial Services, and Insurance) companies are 14-20% higher this month compared to a year earlier.

Hiring in the April-June Quarter

Industry executives predict that about 25,000-30,000 frontline sales personnel will be hired in the April-June quarter to cater to the rising demand in the retail and unsecured loan categories. This increase in hiring reflects the robust competition among banks and NBFCs (Non-Banking Financial Companies) to improve market share and the strong demand for consumer credit in mid- and large-size ticket categories.

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Reasons for the Increase in Demand

The demand growth in the credit card and personal loans segment is driven by several factors. According to Kartik Narayan, the Chief Executive-Staffing at Teamlease Services, there has been a 14-15% year-on-year increase in demand for staffing in this space. This reflects the competition among banks and NBFCs to improve market share and the strong demand for consumer credit in mid- and large-size ticket categories.

Lohit Bhatia, the President of Workforce Management at Quess Corp, explains that the credit card and personal loans segment has been growing at a rate of nearly 15-20%. This growth is expected to continue as credit card penetration and purchases on EMI (Equated Monthly Installments) increase.

Importance of Adequate Staffing

Industry experts emphasize the need for banks and financial services institutions to adequately staff the credit card and personal loans segment. The share of credit card and personal loans in the total loan portfolio is still very low in India. Outstanding credit card loans constitute just about 1.6% of banks’ overall loan portfolio. This indicates a significant opportunity for expansion, considering the rising consumption levels and the proliferation of online and e-commerce buying.

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Conclusion

Despite the Reserve Bank of India’s regulations on unsecured loans and the moderation in the growth of personal loans, there is an increasing demand for manpower in the sales of credit cards and loans. This demand reflects the competition among banks and NBFCs to improve market share and the strong demand for consumer credit. Adequate staffing in this segment is crucial for banks and financial services institutions to take advantage of the long-term structural opportunities presented by the credit card and personal loans market.

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