Fino Payments Bank aims to break even in the next 18-24 months, executive vice president and head-products & alliances Ashish Ahuja tells Mitali Salian.
by Mitali Salian
Could you throw some light on the payment bank’s business model?
We want to be the biggest financial distribution setup in the country to service the mass market. That is the typical progression we have been carrying on. We believe that when a large financial distribution reach provides access to a range of products to the customer closer to his or her place, customer does not feel the limitations of a payments bank. For that, in addition to our CASA and domestic remittance offerings, we will add more products through partnerships with banks and NBFCs that can be distributed through our network.
Currently, where does the payments bank get a major chunk of its business from?
Opening an account, to my mind, is not the only parameter by which you can drive the entire organization. In addition to CASA, domestic remittances, Micro ATMs and AePS (Aadhaar enabled payment system) transactions as well as cross selling of life and general insurance products are major lines of businesses. To this we plan to add lending referrals and MFs.
Domestic remittances, we do anywhere between Rs 2500-Rs 3000 crore of throughput a month, up by almost 8 times, from Rs 350 crore in July 2017 since we became a bank. On micro ATM and AePS we clock Rs 1,000-1,200 crore a month. Currently, we have about 30,000 micro ATM devices; by March 2019, this is expected to reach 40,000. We plan to increase the devices by 5 times by FY19-20, through which micro ATM transactions are expected to reach Rs 3,500-5,000 crore a month.
What are your growth plans for the coming financial year?
We intend to add to our merchant number taking the count from the current over 75,000 to 1,50,000 points. Our belief is that there would be hardly anybody without a bank account. Our intent is on the servicing angle. Here, there will be an opportunity to cross sell, deeper penetration and engagement with the customer.
We will be starting loan referrals for which we have got RBI permission. We are currently working on the processes and product design for small-ticket-size loans ranging from Rs 5,000 to Rs 50,000 with repayment tenure of 6 to 18 months. It will take a few months to launch these products in partnership with either banks or NBFCs. Our banking outlets and merchant points will act as lead generators.
Also, we will look at establishing our footprint in the Northeast, Jharkhand, Odisha and West Bengal. In Kerala, we will service inward international remittances as a cash pay-out service provider.
How is the bank placed in terms of capital? Any fund-raising plans in the near future?
We have enough capital right now, well above the Rs 100-crore threshold as laid down in the guidelines. We will take a call on future requirement at an appropriate time. We aim to break even in the next 18-