Leading non-banking lender, L&T Finance Holdings, which had a prominent presence in rural areas but has been scaling down exposure to distress in the hinterlands, has sacked over 500 employees.
Chairman and managing director YM Deosthale termed the sacking as “separation of staff from across the sectors based on their poor performance”.
He warned of more stress in the rural areas. “We may see some stress in the farm sector for the next five to six months. The situation may improve only in the second half of the year, that too if there is a normal monsoon,” he said.
“What we have done is that we reviewed their performance and based on that, slightly more than 500 employees have been separated from across the sectors, including retail, rural and other segments,” Deosthale told PTI.
Deosthale said the rural sector was facing a lot of stress due to consecutive monsoon failures and being a major player in these markets, especially in farm equipment finance, the company has been scaling down operations.
Drought in many parts of the country has left many farmers unable to repay loans. While demand for tractors reduced, the farmers’ ability to repay loans has also diminished, he said.
Asked if the company will reduce its lending rates, he said loan pricing has already fallen last fiscal. “I do believe that it may further come down by 50-60 basis points over next few months,” Deosthale said.
The company reported a 15% rise in consolidated net income at Rs 237 crore for the March quarter on Tuesday, driven by retail and wholesale advances. Income from operations grew 19.77% to Rs 1,957.96 crore, while total disbursements jumped 20% to Rs 10,688 crore.