Category Archives: Business

Expanding non-bank financial companies lift job market

CHENNAI: A new breed of financiers, mostly financial technology companies that have obtained licences from the central bank to operate as non-banking finance companies (NBFCs), is turbo charging the job market.

Various companies — including Zerodha, Faircent, Eduvans and a financial services firm from Cox & Kings — have received an NBFC licence. They are recruiting aggressively in the consumer space. Peer-to-peer (P2P) startups and small finance banks are joining the race to attract top talent. The industry is seeing at least a 100 new players on the financial services map that are expanding operations.

Staffing firm Xpheno’s CEO Kamal Karanth said, “The demand is spread across experience levels and roles just school-finished candidates, mid-level roles and the likes of vice-president, since the NBFC space is becoming more open to lending.” P2P-lending platform Faircent, which in May received a lending licence in the NBFC-P2P segment, is actively looking out for tech, operations and sales roles. Founder Rajat Gandhi said, “We have been seeing a 20% monthon-month growth in the number of applicants for loans since we got our licence. Since we are looking to expand geographies in Delhi, Mumbai, Chennai and Kolkata, we look to triple our hiring by December.”

Kelly Services MD Thammaiah B N sees demand created in the rural and semi-urban areas for operations roles, marketing and in compliance. “While it is obvious that lending will increase, compliance is one of the areas where we see an uptick. Overall, we see an increase in demand in the last two quarters. Experience levels in demand for marketing roles are over three years, while sales personnel with a year of experience can get hired,” he added. Recruiters also see a 20% uptick in salaries.

The turmoil in the banking sector is helping these companies with talent supply. Karanth said, “While at least 25 companies have approached Xpheno looking for hires, the supply of talent is not hard to come by. Senior resources from the banking industry, who look for the startup experience, are looking at NBFCs as the natural place to go to. And it is not like they are taking pay cuts.”

Faircent’s Gandhi adds retaining talent would be a challenge in the years to come.

Tech companies face talent crunch in cloud, data

BENGALURU: Cloud architects, data scientists, storage systems & management specialists, and software architects are the hardest to find technology talent in India. And over the past year, the shortage of data scientists has increased dramatically because of a surge in demand.

A talent supply index (TSI) developed by recruitment company Belong puts the TSI for these roles at 0.2 — in other words, if there are 10, say, cloud architect opportunities, there are only 2 relevant cloud architects available. A cloud architect is an IT professional responsible for overseeing a company’s cloud computing strategy.

The TSI for data scientists has dropped dramatically from 0.7 in 2017 to 0.2 this year. Belong said the demand has shot up by over 400% while the supply has seen only a 19% increase. Data scientists are responsible for using computing systems to collect, analyse and interpret large amounts of data to identify ways to help a business improve operations and gain a competitive edge over rivals.

tech graph

“Among all the roles analysed in 2017, data science has seen the highest increase in demand. Digital transformation along with setting up of global innovation centres (GICs) by telecom, retail, banking and manufacturing enterprises are contributing to this exponential growth. There has never been a time when so much data has been captured, processed, stored and analysed,” Belong said.

Rishabh Kaul, co-founder of Belong, said companies have to invest in data engineering and in experienced professionals who have worked on large data sets. The Belong study looked at 5 lakh candidate profiles across 1.5 million jobs from an exhaustive list of data sources including Git-Hub, StackOverflow, Behance, Facebook, Google and its own data base. Shortages typically lead to surge in salaries, till supply picks up.

The demand for security engineers increased by 120% in the last one year, while supply has risen by only 14%. Kaul said that security hiring is heating up, with banking & financial services accounting for nearly 35% of the demand.

The TSI data showed that for every 100 neural network specialists, there are only 40 available. Be it for self-driving cars, stock market prediction or fraud detection, neural networks can ingest large volumes of images, videos and words to offer desired outcomes. As a subset of machine learning, neural network is a set of algorithms that mimic the brain. Niraj Kumar, scientist at business process services firm Conduent, believes India has to up the game in neural networks. “This fundamentally boils down to core math skills,” he said, and noted that the Chinese trio of Alibaba, Baidu and Tencent are at the cutting edge of AI work. “Recently, Alibaba’s neural network model scored over a human being, providing correct answers to 1,00,000 questions,” he said.

Blockchain, the technology at the root of cryptocurrency, had a TSI of 0.5. Sriram Raghavan, VP in IBM Research (India and Singapore), said the popularity of blockchain has moved from cryptocurrency to business applications across many industries such as insurance, finance, and supply chain logistics, which in turn has increased the demand for skilled developers.

On the shortage of cloud architects, Kashyap Dalal, chief business officer in education tech firm Simplilearn, noted that large enterprisegrade cloud deployments or migration of data centre to the cloud requires a repository of skills including development skills, multi-cloud platform specialisation, devops, and ability to execute processes on the cloud.

Govt open to talks on RBI powers over PSBs

MUMBAI: In an act of reconciliation with the Reserve Bank of India (RBI), officiating finance minister Piyush Goyal has indicated that the government was open to addressing the RBI’s grouse of not having powers to regulate public sector banks. This is a climbdown from its earlier position when the finance ministry insisted that the central bank had adequate powers.

In the aftermath of the Nirav Modi scam at the Punjab National Bank (PNB, the finance ministry and the RBI governor Urjit Patel had traded charges on lack of accountability and lack of powers. Patel had responded to indirect allegations that the RBI had failed to detect the scam.

Speaking at the State Bank of India’s 5th banking conclave, Goyal said, “As regard the RBI powers, we are examining it and that’s an issue that we will sit with the RBI and will sort out. The government has an open mind on this issue.” He added that the government was willing to put in whatever capital was required into public sector banks.

Goyal said that he has also discussed with banks a strategy for encashing some of their non-core assets quickly. “I understand some of the public-sector systems will take time till these assets can be sold through a transparent mechanism can be converted into capital for banks. We are working to see if we could look at an intermediate solution for that,” said Goyal.

When questioned on an earlier Budget proposal made more than a decade ago to bring down government stake in PSU banks, Goyal said there is absolutely no proposal to reduce government shareholding below 51%. “They will continue to be PSBs with 51% holding in all the 20 banks that are under the Banking Regulation Act,” Goyal added.

He said that the Sunil Mehta committee, constitute to look into a solution for the bad loan pile-up in public sector banks, had recommended setting up a bad bank-type asset management company (AMC) to resolve the bad loan problem. “They have also done an analysis of the capital requirement and we are working in tandem with the team to see what needs to be done,” said Goyal.

Anti-corruption law stalling govt, bankers: FM

MUMBAI: Union minister Arun Jaitley lashed out at the three-decade-old Prevention of Corruption Act on Tuesday, blaming it for slowing down decision making and describing it as a “charter for bringing government to a standstill”.

Jaitley urged all political parties to support amending the law, failing which he said government officials or bankers could not be blamed for delay in decision making.

“The PCA is one of the most badly drafted laws. It does not confine corruption to bribery or dishonest behavior but it almost puts even honestly taken decisions, which with the wisdom of hindsight prove to be wrong, into the category of corruption,” said Jaitley.

Jaitley’s criticism of the Prevention of Corruption Act comes at a time when the Central Bureau of Investigation has arrested, or chargesheeted half a dozen CEOs of public sector banks for loans that have turned out to be in default.

“It creates a legislative system where even bonafide decisions, in a post-mortem done after 10 years, are found to be erroneous and people are held accountable. The only defense strategy that is available is not to take any decision. This will apply to bankers and the bureaucracy,” said Jaitley.

The NDA government had proposed an amendment to the PCA to ensure that bonafide decisions that subsequently turn wrong are not treated as acts of corruption. However, it has not been able to push through the bill in Parliament.

Jaitley also criticised state investigative agencies acting against central government officials, in a reference to the Maharashtra police’s arrest of the chief executive officer of Bank of Maharashtra.

“India’s federal structure has jurisdiction vested with the central government and also with the states. But if the state police could investigate the Centre it would completely upset the federal balance. You will have a minister, a cabinet secretary or secretary of central government or director of RBI or Sebi being investigated by sub-inspectors of the state police,” said Jaitley.

In the case of Bank of Maharashtra, the state government police arrested the CEO, Ravindra P Marathe and executive director Rajendra K Gupta in a case of loans advanced to the DSL group.

““To maintain the federal balance, you require an element of statesmanship. There can be situations including the one that I am obliquely indicating at where the threat to federalism comes from the state and not from the Centre. Therefore, the need of the hour is a certain level of statesmanship by all governments and investigating agencies,” said Jaitley.

Jaitley’s criticism of the Prevention of Corruption Act comes at a time when the Central Bureau of Investigation has arrested, or chargesheeted half a dozen CEOs of public sector banks for loans that have turned out to be in default.

“It creates a legislative system where even bonafide decisions, in a post-mortem done after 10 years, are found to be erroneous and people are held accountable. The only defense strategy that is available is not to take any decision. This will apply to bankers and the bureaucracy,” said Jaitley.

The NDA government had proposed an amendment to the PCA to ensure that bonafide decisions that subsequently turn wrong are not treated as acts of corruption. However, it has not been able to push through the bill in Parliament.

Jaitley also criticised state investigative agencies acting against central government officials, in a reference to the Maharashtra police’s arrest of the CEO of Bank of Maharashtra.

“India’s federal structure has jurisdiction vested with the central government and also with the states. But if the state police could investigate the Centre it would completely upset the federal balance. You will have a minister, a cabinet secretary or secretary of central government or director of RBI or Sebi being investigated by sub-inspectors of the state police,” said Jaitley. In the case of Bank of Maharashtra, the state government police arrested the chief executive, Ravindra P Marathe and executive director Rajendra K Gupta in a case of loans advanced to the DSL group.

“To maintain the federal balance, you require an element of statesmanship. There can be situations including the one that I am obliquely indicating at where the threat to federalism comes from the state and not from the Centre. Therefore, the need of the hour is a certain level of statesmanship by all governments and investigating agencies,” said Jaitley.

Air India's Mumbai building to be sold to JNPT: Nitin Gadkari

MUMBAI: Air India‘s iconic 23-storey building at Nariman Point here will be sold to Jawaharlal Nehru Port Trust to keep the ownership of what was once the carrier’s headquarters with the government, Union Minister Nitin Gadkari has said.

The government is looking at selling Air India’s building on the Marine drive as well as ground handling and aircraft maintenance units after a plan to sell the ailing state carrier failed to attract buyers.

Gadkari said while the valuation of the building will be worked out between the ministries of civil aviation and shipping, the building after the same would continue to be called ‘Air India’ with the carrier’s emblem, which is visible from the Arabian Sea.

The building, which was the airline’s headquarters till February 2013 before it was vacated as part of its asset-monetisation plan, is considered as a prime property and expected to fetch high valuations.

“There was talk about selling the building. I said to (civil aviation ministry) don’t sell it. We live in Mumbai, it is our icon. The emblem of Air India can be seen from the sea. It is a matter of our pride. They said we don’t have money to pay employees.

“I told them you decide the price, I will ask JNPT to buy it. The building should remain with the government. Both the secretaries will sit together and decide the value and we will pay for it,” Gadkari said.

The minister was speaking at the executive meeting of Federation of PTI Employees’ Unions here last night.

People of Mumbai would be “pained” to see the building being bought by any individual in private capacity. Therefore, the government must retain its ownership, he said, adding that there was no shortage of funds for the purpose.

“We may give it on rent to government offices (on buying the building). But its name will remain after Air India. That emblem (of Air India) will remain there,” he said.

There are at least 10,800 square feet of space on each floor of the building.

The proposal to sell the building to JNPT comes after the government’s efforts of strategic disinvestment of Air India, which is in financial crisis, failed to take off. Its debt burden is estimated to be over Rs 50,000 crore.

The JNPT, located at Navi Mumbai and formerly known as the Nhava Sheva Port, handles around 55 per cent of the country’s container cargo and has an annual profit worth Rs 1,300 crore.

It handled 66 million tonnes of container cargo in 2017-18.

LIC's stake buy in IDBI Bank may not need Parliament nod

NEW DELHI: The proposed 51 per cent stake purchase by insurance major Life Insurance Corporation in IDBI Bank may not require Parliament’s approval as it does not require any changes in the LIC Act, sources said.

Since it is going to be a financial deal as per the LIC Act, the legislation would not require amendment, sources said.

However, sources said, it would need cabinet approval if the proposed deal gets all regulatory approval.

Although, the proposed acquisition by LIC would not bring any money to the government, the bank would get capital support between Rs 10,000 crore and Rs 13,000 crore depending on the share price of the bank.

The bank intends to issue fresh shares so that LIC stake goes up to 51 per cent. Simultaneously, government stake will come down from the existing 80.96 per cent.

Following the issuance of preference shares to LIC, IDBI Bank will shed its character of PSU lender.

Last week, Irdai permitted insurance behemoth LIC to acquire up to 51 per cent stake in state-owned IDBI Bank, a development that will help convert the debt-ridden lender into a private sector entity.

The Insurance Regulatory and Development Authority of India (Irdai) permission help LIC increase the current stake from 10.82 per cent to 51 per cent in IDBI Bank.

A possible scenario would be the insurance major making IDBI Bank as a subsidiary on the line of its housing finance and mutual fund businesses. According to the sources, there would be business synergies in case the LIC-IDBI Bank deal materialises.

In his Budget speech for 2016-17, then Finance Minister Arun Jaitley had said the process of transformation of IDBI Bank has already started. “Government will take it forward and also consider the option of reducing its stake to below 50 per cent,” he had said.

State-owned LIC has been looking to enter the banking space by acquiring a majority stake in IDBI Bank as the deal is expected to provide business synergies despite the lender’s stressed balance sheet.

For LIC, it will get about 2,000 branches through which it can sell its products while the bank would get massive funds of LIC.

The bank would also get accounts of about 22 crore policy holders and subsequent flow of fund into their account.

No plans to close operations at Brady House branch in Mumbai: PNB

NEW DELHI: Fraud-hit Punjab National Bank (PNB) on Tuesday said it has no plans to close operations at its Brady House branch, the fountainhead of the Rs 14,000 crore Nirav Modi scam.

Nirav Modi and his uncle Mehul Choksi, in connivance with certain bank officials, allegedly cheated PNB of about Rs 14,000 crore through issuance of fraudulent Letters of Undertaking (LoUs).

PNB’s Brady House branch in Mumbai had fraudulently issued LoUs for the group of companies belonging to Nirav Modi since March 2011.

“PNB has no plans to close operations in the Brady House branch in Mumbai. Reallocation of some of the accounts is part of the regular restructuring process at PNB to strengthen internal systems and processes and centralize certain critical functions,” a spokesperson of the bank said.

Retail operations for PNB customers continue to operate from the branch, the official said.

With regards to provision made for the loss incurred on account of the Nirav Modi fraud, the bank provided Rs 7,178 crore, 50 per cent of the total amount of Rs 14,356 crore, in the fourth quarter of 2017-18. The remaining amount will be covered in the three quarters of the current fiscal year.

PNB paid Rs 6,586.11 crore to other banks to discharge its liabilities towards Letters of Undertakings (LoUs) and Foreign Letters of Credit (FLCs) issued fraudulently and in unauthorised manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank, which was then not integrated with CBS (Core Banking Solution).

Govt to change base years for GDP, retail inflation calculation

NEW DELHI: The government will change the base year for calculation of GDP and retail inflation to 2017-18 and 2018 respectively, which is likely to come to effect by 2019-20.

The last base year for GDP, IIP and consumer price index was revised to 2011-12 and 2012 (for inflation), minister of statistics and programme implementation Sadananda Gowda said here on Tuesday.

“The revisions facilitated more accurate assessment of the progress of the economy and the society. Steps are being initiated for the next round of revision also, for GDP we would like to revise the base year to 2017-18 and base year for consumer retail inflation to 2018,” Gowda told reporters here.

Enlisting the achievements of the NDA government in past four years, Gowda said fundamental principles of the United Nations were adopted in 2016 to calculate official statistics.

The minister sought to discredit the debate that the government has changed the GDP and CPI calculation methodologies among others to suit its needs.

“These principles are aimed at promoting good practices and professional ethics in production and dissemination of official statistics,” he said further.

Rupee recovers from 5-year low, up 23 paise against dollar

MUMBAI: The rupee on Tuesday made a strong comeback against the US currency after taking a hammering yesterday, recouping by a steep 23 paise to end at 68.57 on fresh dollar selling by exporters and corporates.

Heavy intervention by the Reserve Bank along with positive trend in local equity markets largely supported the home currency.

Overall, sentiment turned increasingly bullish on general dollar weakness related to twists and turns following the US-China trade war rhetoric.

Although, forex market exhibited some nervousness in early trade.

Bruised by multiple negative headwinds, the Indian unit ended at a near five-year low of 68.80 on Monday against the resurgent dollar bull.

The rupee had fell to a record low of 69.10 last week.

Crude prices rose sharply after Libya declared force majeure on some of its crude exports, while the loss of Canadian supplies helped lifted US crude to levels not seen since late 2014.

Brent crude futures, an international benchmark, is trading up at $78.25 a barrel in early Asian trade.

Earlier, extending its bearish stance, the domestic unit resumed lower at 68.91 from the last close of 68.80 at the interbank foreign exchange (forex) market.

It hit a low of 68.97 in early deals moving in sync with the weakening of other currencies in the region and also heavily weighed down by steady capital outflows.

Reversing early steep losses, the home unit bounced back in late afternoon trade to trade at a session high of 68.56 before ending at 68.57, showing a smart gain of 23 paise, or 0.33 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 68.6935 and for the euro at 80.0211.

The 10-year benchmark bond yield drifted to 7.88 per cent from 7.91 per cent.

On the macro front, growth of eight infrastructure industries dropped to a ten-month low of 3.6 per cent in May due to a decline in production of crude oil and natural gas.

This is the lowest growth rate since July 2017 when infrastructure industries had expanded by 2.9 per cent. The growth rate in April was 4.6 per cent.

In the meantime, India’s fiscal deficit in May touched 55.3 per cent of the budget estimate (BE) on account of lower expenditure as compared to 68.3 per cent in the corresponding period last year.

The government had budgeted to cut fiscal deficit to 3.3 per cent of GDP in current fiscal, from 3.53 per cent of GDP in 2017-18.

Meanwhile, the rebound on the local equities came on the back of value buying in beaten down stocks along with some short-covering. The global capital markets also showed some stability after recent drubbing.

The greenback, however, traded lower against its major trading rivals.

The dollar index, which measures the greenback’s value against basket of six major currencies, was down at 94.38.

The yuan hit its weakest level against the dollar in 11 months on Tuesday before bouncing back.

In the cross-currency trade, the rupee bounced back against the pound sterling to settle at 90.42 per pound from 90.47 and regained against the Japanese yen to finish at 61.88 per 100 yens from 62.11 earlier.

The local currency also edged up against the euro to close at 79.91 as compared to 80.04.

Elsewhere, the British pound regained some lost ground against the US Dollar after data showed UK construction PMI that accelerated to seven months high of 53.1 in June despite unfavourable situation surrounding Brexit talks might.

The Euro, however remained under downward pressure despite an agreement on immigration deal within German coalition.

In forward market today, premium for dollar showed a steady to easy trend owing to lack of market moving factors.

In forward market today, the benchmark six-month forward premium payable in November was unchanged at 122-124 paise, while the far-forward May 2019 contract end at 270-272 paise from 271-273 paise.

Government open to discuss RBI's power over regulating PSBs: Piyush Goyal

MUMBAI: Finance minister Piyush Goyal on Tuesday said the government is open to discuss the issues that the Reserve Bank of India (RBI) had raised recently over the lack of powers in regulating state-run lenders.

Amidst criticism that the apex bank had failed in its regulatory oversight over government-owned banks following the Rs 13,500-crore PNB scam, RBI governor Urjit Patel had recently blamed it on the lack of powers to control them.

“The government is open to discuss with the RBI all the issues it has on regulating state-run banks,” Goyal told an industry event here this evening.

The minister also ruled out government pairing its stake in public sector banks (PSBs), saying there is no proposal with the government to lower its ownership in state-run banks to under 51 per cent in 20 of them.

The statement comes amidst strong opposition from banking and LIC unions to the government plans to sell its majority stake in the crippled IDBI Bank to LIC.

Admitting that the banking system has failed the public in meeting their high expectations of them, Goyal said bankers have failed to live up to the high standards and ethics expected of them.

He also said the government will back all the state-run banks with enough capital.

Admitting that PSBs had faced political interferences in the past, Goyal said but under this government no minister is interfering in the operational matters of the lenders.

A day after accepting the Sunil Mehta panel recommendation to set up an asset management company (AMC), that will function like a bad bank to resolve smaller loan defaults of up to Rs 500 crore, Goyal said liquidation can’t be the panacea for all NPAs as there are genuine business failures which need to be resolved.