Muthoot Finance will recruit about 2,000 people this year, Managing Director George Alexander Muthoot told Business Line today.
The current year marks the beginning of a “consolidation phase”, when the company will slow down branch expansion. It will open not more than 250 new branches this year compared with 1,000 in each of the last two years.
He said the company prefers to recruit graduates from the same area.
Muthoot Finance is a non-banking finance company that specialises in giving loans against pledged gold. Today, it manages gold loan assets of Rs 23,000 crore.
George Muthoot said that the company expects to end the year with a turnover of around Rs 26,000 crore.
A part of the reason for slowing down is the realisation that the gold loan business is growing too fast for the comfort of the Reserve Bank of India.
“I don’t blame the regulator,” Muthoot said, referring to the recent regulations brought in by the RBI.
The industry has been growing too fast for comfort, he said. (The RBI regulations include a rule that stipulates that the lender cannot lend more than 60 per cent of the value of the pledged gold, rules that make assignment or securitisation of gold loans difficult, and imposition of tighter limits on banks’ exposure to these NBFCs.
The loan-to-value is seen as the biggest dampener to the growth of loan assets.
Muthoot said that the industry was keenly awaiting the report of the KUB Rao committee of the RBI. The report was to be submitted by July 31, but since it has not yet happened, it is expected to come out any time now.
ALSO READ: >Muthoot Finance to raise Rs 500 cr via NCDs