Banks and non-banking financial companies (NBFCs), focussed on retail lending and microfinance, are beefing up their sales teams, especially in tier-2 and tier-3 cities, amid a regulatory clampdown on digital banking and unsecured lending.

TeamLease Services, a staffing firm, has 10,000-13,000 such open positions for this quarter, a 25-30 per cent increase over the year-ago period. This figure is expected to surge in the September quarter as credit card sales pick up ahead of the festive season. Financial year 2023-24 saw a jump of 20-25 per cent in sales staff hiring in tier-2 cities and a 30-35 per cent growth in tier-3 cities.

Retail lending

“Hiring for front-end roles is largely governed by the demand coming from retail lending, specifically in the credit card and microfinance space. We are seeing a high demand for such staff in tier 2 and tier 3 cities,” said Krishnendu Chatterjee, VP and Business Head - Staffing Services, TeamLease Services.

Seventy per cent of the open positions for credit card sales are driven by private banks, Chatterjee said.

In their Q4 earnings, several banks guided that hiring will remain accelerated for frontline ‘feet on street’ segments such as deposit mobilisation, consumer loans and collections.

“In addition to tech-related recruitment, pressure on the liability side has pushed banks to open more branches, which has led to a surge in entry to mid-level hiring. Fintechs have been struggling with loan recoveries, and have been hiring to strengthen their collection teams,” said a senior official at a diversified NBFC.

HDFC Bank, for instance, opened 917 branches in FY24, 38 per cent lower than FY23 but considerably higher than FY22 (742) and FY21 (362).

Regulatory hurdles

The RBI has put in curbs to control the retail credit build-up and address challenges posed by the rise of digital payments. While banks have put more controls in place and approval rates for credit cards have dipped, the focus has shifted to generating more leads on ground – in public spaces such as petrol pumps, malls, airports and metro stations, where conversion rates tend to be higher.

“Given the restrictions placed by RBI on products sold through the digital mode, on-ground sales and in-person KYC has assumed greater importance,” said Chatterjee.

The increased headcount could push up annual salary costs by 10-15 per cent for the firms, he said. These permanent, contractual roles typically require 0-3 years experience, with salaries of ₹2.15-3 lakh per annum and additional incentives of up to 35 per cent of monthly pay.

Attrition woes

Despite a moderation for global BFSI players, attrition rates continue to be elevated at 30-45 per cent for domestic players, especially small and mid-sized lenders, said market watchers.

SBI Chairman Dinesh Khara recently said the bank is looking to hire 11,000-12,000 employees, especially for associate and officers level positions where 85 per cent employees are engineers. Kotak Mahindra Bank, which is facing regulatory restrictions due to lapses in its technology systems, said it had hired 500 engineers in the past two years and plans to recruit around 400 in FY25 to enhance its technology infrastructure.