At a time when banks are saddled with growing NPAs and managing regulations, non-banking finance companies (NBFCs) and newer, nimbler banks seem to be gnawing at traditional banking talent. Over the last three-four years, NBFCs have done better than banks as they had lesser issues of bad loans and profitability and fewer controls enabling them to expand, contribute more to credit growth and tap into growth segments, such as mortgages, home loans and gold loans. “NBFCs are looking to hire similar talent to banks — analytics, control functions and digital skills are becoming important,” says Roopank Chaudhary, associate partner, McLagan Aon Hewitt. Sample these. A year back, a very senior retail banker of a top multinational bank signed up with a much smaller new bank, an erstwhile microfinance institution. Again, over the last two years, about four-five people in senior management have quit a top public sector bank to join a new bank, which on average has more than doubled their pay packages. Or, for that matter, a vice-president of a private bank joining an NBFC at two times his pay a couple of years ago.
Annual salary increases for NBFCs have also outstripped that of banking in last two years. Such stories are gathering steam with every passing day as NBFCs and smaller banks carry on expanding in Tier-3 and 4 towns with fewer restrictions. “NBFCs are paying almost three-four times of what people make in banks,” says Joydeep Dutta Roy, head – HRM & capability building, Bank of Baroda. Erstwhile microfinance institutions that have turned into small banks and NBFCs are well penetrated in Tier-3 and 4 towns where there is seemingly a strong demand for capital. Unlike larger banks, reach is not a hindrance for them as they have the franchise. “What they are struggling with is getting the right skill set to be able to scale up, expand and diversify, so they are hiring traditional bankers,” says Chaudhary.