The Reserve Bank of India (RBI) must consider allowing payments banks to offer small ticket loans of Rs 2 lakh- Rs 5 lakh quantum and also accept fixed deposits, Airtel Payments Bank MD Anubrata Biswas told FE.
Presently, the RBI allows payments banks to accept Rs 2 lakh in form of low-cost deposits and does not allow such players to offer loans or fixed deposits. “Our thought is that if we are allowed to do those products, then we can immediately impact millions and millions of lives, which today may be out of the formal systems,” Biswas said.
The payments bank’s bottomline grew 143% year-on-year (YoY) to Rs 5 crore during the quarter ended June, and revenue rose 41% YoY to Rs 400 crore during the same period. Total deposits, meanwhile, increased by 48% YoY to Rs 1,923 crore as of the end of June, while the total number of monthly transacting users rose by 13% YoY to 55 million during the same period. Further, its gross merchandise value or GMV stood at Rs 2.38 trillion on an annualized basis during the quarter ending in June.
Allowing Airtel Payments Bank to offer FD and small ticket loans becomes more important particularly because it is owned by a large corporate house and would not get a small finance bank license by the regulator and secondly payment banks are also not allowed to open subsidiaries where it could potentially do lending.
The exit of Fino Payment Bank, whose Board has approved transition to small finance bank, from the payments bank space would also not make much headroom for Airtel Payments Bank as the former has stated its strategy of continuing to stay in its mainstay payments business even after transitioning to a small finance bank.
“I don’t see necessarily competitive intensity reducing, but I would say that with a 500 million consumer opportunity waiting to be served and unlocked, the country needs more and more players operating on the transaction liability side, such as us,” the MD said.
Lastly, the payments bank is also willing to work with fintechs who can either provide services related to customer convenience, on the lines of KYC and assessing risk. Another important criteria for Airtel Payments Bank to partner with fintechs is the scalability of their products and a long term vision for partnering with the payments bank.