Between 60% and 70% of transactions at Fino Payments Bank are happening through doorstep banking, managing director and chief executive officer Rishi Gupta tells Shritama Bose.
Between 60% and 70% of transactions at Fino Payments Bank are happening through doorstep banking, managing director and chief executive officer Rishi Gupta tells Shritama Bose. The bank will require Rs 200 crore of additional funding in FY18, he adds, which is likely to come from a strategic investor. Excerpts:
How has growth been since launch?
We launched on July 17. In the first month, we got all our systems integrated with the banks, got the debit cards issued and these reached the branches. Most of that piece is now over. We were very clear from day zero that we want to work in the mass-market segment. People with incomes between `1 lakh and `5 lakh are our target customers. The employees we have hired earn between Rs 12,000- Rs 15,000 and so we had to make a very simple interface to keep things easy for both customers and employees.The account-opening process looks very positive. The throughput in the accounts is also quite high. People are buying insurance, doing bill payments and recharges.Two things differentiate us. One is the speed and ease of transactions. We can open an account and issue a debit card in six minutes. The other thing is that we keep branches open till late in the evening because most of our customers are doing business through the day or earning on a daily basis. We also provide doorstep service. So roughly 60-70% of our transactions are actually happening outside the branches through this channel.
Are most of the remittances happening through physical or digital means?
Both channels are seeing transactions. People are making bill payments through our Bpay app. In a week’s time, we’ll launch our app, where the wallet and savings account are integrated. This is a new kind of product.
What is the size of your branch network?
We have 422 branches right now. We plan to add about 200 branches or banking outlets per annum. We have 50,000 points right now, of which 25,000 are on the retail side (with merchants and small retailers) and 25,000 on the corporate side (in its role as business correspondent to banks). We’ll take that to one lakh points in the next three to five years.
We are present in 14 states. We have a rural presence in four states – Madhya Pradesh, Maharashtra, UP (Uttar Pradesh) and Bihar. As for cities, we are present in 35. We would like to deepen our presence in these locations rather than expanding beyond them.
What is the average turnover of the merchant that you are targeting?
We are targeting the MSME (medium, small and micro enterprises) segment, who would see a turnover of `10-20 lakh per month. They are largely traders who may be doing `30,000-40,000 worth of trading a day or less.
Which are the payment channels you have enabled?
We have RTGS (Real Time Gross Settlement), NEFT (National Electronic Fund Transfer) and IMPS (Immediate Payment Service). As for AadhaarPay, BHIM (Bharat Interface for Money) and UPI (Unified Payments Interface), we are in the process of launching those. By December, we should have all the modes of payment available in the ecosystem.
Apart from current and savings accounts, what are the other products you are offering?
We are selling insurance products. We are going to start with mutual funds, again by December. We are also talking to banks for RD (recurring deposits) and FD (fixed deposits) because these I can’t offer on my own. So I am talking to banks about a CASA-plus, which means that if someone wants to deposit more than R1 lakh, there can be a seamless transfer or withdrawal of that amount. A tie-up should emerge soon.
Do you plan to take the savings rate below 4%?
Not right now. We have not thought about it because the balances have only started to come now.
Once your entire setup is in place, how much of your revenues would be coming from cross-selling of products and how much from service charges?
There are four lines of business – CASA, remittances, the BC business and cross-sell products. Each of them would account for 15-20% of our business.
What is your growth target for FY18 in terms of the deposit base?
The first target for us is deposits worth Rs 10,000 crore, for which we don’t have a timeline.
What will be your capital requirement for FY18?
There is enough money. We just need a little more money to be aggressive in terms of marketing spends and technology. That would be about Rs 200 crore.
Will this come from existing investors?
No, we’ll look at expanding our investor base so that we can get some strategic investors.
Any timeline for listing?
Anywhere between two to four years from now should be a good time frame.