Big employment opportunities await those who specialise in tech
Investments by corporates in talent that were expected to happen by 2025 are happening in coming months
Q: What are the opportunities for employment after this pandemic is brought under control? My son proposes to go to the United States. I am in a dilemma as to what course he should take that would enable him to find a job in that country and be eligible for an employment visa. I am told that the new age technology area is promising.
A: Large technology companies, as well as banking and financial services entities in the US, are scouting for talent in the cloud infrastructure space. There is a demand-supply mismatch in this field and companies are offering salaries that are 25 to 30 per cent higher than those offered in regular technology jobs. There is also a substantial demand for persons who specialise in data mining as well as in cybersecurity.
Investments by corporates in talent that were expected to happen by 2025 are happening in the coming months. More professionals who skill themselves in such niche areas will find attractive job offers coming their way as demand for such talent is set to increase with more data centres opening up. Great opportunity lies for those who are qualified in handling servers and are also competent to service hardware. Companies are actively hiring talent across locations as they are building new data centres and adding more capacity to existing properties to cater to increasing demand for cloud storage.
Q: Small business enterprises are having difficulties in repaying loans to banks and financial institutions as their business has shrunk substantially during the past four months. Is anything being done to help small entrepreneurs survive?
A: Financial institutions and banks have been permitted to restructure loans of individual entrepreneurs and companies without classifying them as non-performing assets. This is a one-time dispensation of the Reserve Bank of India (RBI) to help entrepreneurs and corporate entities to manage their financial stress caused by the Covid-19 pandemic. A committee of experts has been constituted to finalise the parameters for such restructuring and suggest ways in which the proposals can be implemented.
Banks have been given time until December 31, 2020, to formulate a restructuring plan. Once this is done, they will have 90 days to implement the plan in case of entrepreneurs and 180 days in the case of companies. The RBI has also relaxed the credit rating criteria for restructured loans. Banks will no longer have to seek a rating from two rating agencies in respect of such loans which are of more than Rs5 billion. To ensure that this relaxation is not misused, necessary safeguards have been provided; this includes prudent entry norms, specific binding covenants, independent validation and strict post-implementation performance monitoring. This will ensure that the financial stability of the banking system is not jeopardised.
Q: What are the avenues to raise temporary additional funds for working capital or personal expenses in order to withstand the downturn in businesses?
A: The quickest way to raise loans for personal purposes or for meeting the working capital requirements of businesses is to pledge gold. Gold prices have hit a record level due to the global quest for safe-haven assets. This has made the gold loan option an attractive method for raising funds which are urgently needed. Gold loan companies have witnessed a 35 per cebt rise in daily loan applications and disbursements during the past three months.
Banks are also playing a significant role in giving loans to retail borrowers. They are now permitted to give loans upto 90 per cent of the value of gold. Of course, the purity of the gold is first determined by banks in order to arrive at the true value. This would mean that a person can raise temporary loans within three days of the application being made, provided the report of the purity of gold is received within two days of the date of the application. Banks are particularly keen to ensure that their valuation and risk management processes remain stringent and robust. Finance companies are generally conservative in giving loans to the tune of 60-67 per cent of the value of gold. This is in view of the sharp swings in gold prices in recent weeks. A sudden fall in gold's price would considerably dampen the advantages of this mode of finance.
H.P. Ranina is a practicing lawyer, specialising in tax and exchange management laws of India.
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