Niche banks likely to create 30,000 jobs

  • Mahua Venkatesh, Hindustan Times, New Delhi
  • Updated: Feb 17, 2015 23:53 IST

The flurry of applications for setting up of new payments and small finance banks indicates a positive climate for the creation of thousands of new jobs in semi-urban and rural areas.

These new jobs are expected to be in the low to middle segments. Besides, bankers have said there could be “some poaching” by the public sector banks as well.

The Reserve Bank of India has received 70 applications for setting up these specialised banks, and it is yet to be seen how many licenses the central bank grants.

However, experts estimate the figure to be at least 20-25. And each bank would require 1,500-2,000 employees – engaged directly or indirectly over a period of four years. Going by this, easily 30,000 jobs would be created in the banking sector.

“A large number of jobs could be created. Till an existing microfinance company or non-banking financial company converts into a bank, all others would require large number of employees, of whom some would be directly employed,” Ashvin Parekh, managing partner, Ashvin Parekh Advisory Services told Hindustan Times.

Parekh also opined that these niche banks would need local people. “Except for 10-12 people in senior positions, most employees would be at the branch-level located in smaller towns and would require training,” he said.

A senior public sector executive, who did not wish to be identified, said there could also be poaching from local branches.

“With no consensus on wage revision, there is discontent (among employees). If the salary structure is better, then some may quit and join these new banks.”

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