Fino Payments Bank (FPBL) is focusing on making itself bigger and has “no rush” to convert itself into a small finance bank (SFB), as it does not want to get into the high-risk lending business right now amid the Covid pandemic.
The bank will decide on converting itself into an SFB after the Reserve Bank of India comes up with the specific guidelines and the overall banking ecosystem, especially the asset side, stabilises.
“Right now, if you ask me, lending businesses are going through their own pain. Especially, small finance banks are facing challenges because of the microfinance portfolio. So, we will have to see how the lending business changes post pandemic. And, as a payment bank, we are doing quite well. There is no lending risk as such, which is good,” Rishi Gupta, MD & CEO, told FE.
“As of now, we are satisfied with what we are doing. And, we want to grow this. We will have to wait for both the guidelines on licensing to come as well as the post-Covid things to stabilise on the asset side. Only after that something we will decide,” Gupta pointed out.
Last month, the RBI doubled the maximum limit of funds account holders of payments bank can keep in their accounts to Rs 2 lakh. “We are quite happy. The RBI’s measure will help us provide more services to our customers. Right now, we are quite satisfied with the payments bank and our focus is to make it bigger and better. We are not looking at any change in the asset side as of now… Asset has become more high risk business right now,” the MD said.
FPBL had turned profitable at the operating level in FY2019-20. “Since then, the profit and income have been growing in every quarter,” the MD said, adding in the last four years the bank’s volume of business grew by 9-10 times. At the end of March 2021, monthly total value of transaction, including both digital and non-digital modes, was around Rs 14,000 crore compared to Rs 8,500 crore in the year ago period.
“Our monthly transaction figure was down in April because of the second Covid wave and lock downs. Figure in May is better than April. And, I think as the number of new infections continues to drop, more people start recovering and getting vaccinated, the number will start to grow again. Payments banks will not be negatively impacted because of the Covid,” Gupta said.