Fino Payments Bank has taken care of its margins by having current accounts form a 70% share of its liability franchise, Rishi Gupta, managing director and chief executive officer, tells Shritama Bose. The bank will see a 50% growth in revenues in FY19 and expects to break even in another two years, he adds. Excerpts: You have built a deposit franchise of close to one million. Has all the ramp-up been on the CASA (current account savings account) side? It is 100% CASA. We are not forcing people coming to our branches to open accounts. We do more transactions for other banks\u2019 customers than for our own customers. We see 4.5 million remittance transactions and we are among the top 10 entities in the country who are doing that many transactions. Going ahead, what kind of deposits will you be focused on? Our focus will be more on current accounts because we want more shopkeepers who are moving to GST (Goods and Services Tax) to become part of our ecosystem. What are the average account balances? The average balance is about Rs 2,500 in current accounts. As you expand your digital presence, do you see traders or merchants reluctant to join the network because the GST now brings them under coverage? No, I think people are slowly moving in that direction. The government has also now come up with incentives for those joining the GST platform. Will you hold your savings rate at 4%? Absolutely. Our business model does not support anything above that. One of the things about the payments bank model that everyone has been concerned about is the margins because you pay some amount on deposits and you can invest only in government bonds. How are you managing that? It\u2019s a tough business. In the business that I am doing, 70% of my balances are current account balances. So I get a 6% spread there. So my interest cost worth Rs 100-odd crore would be roughly about 1.5% or so. So I have a larger interest in current accounts than savings accounts as I can do a lot of things with the shopkeepers that I cannot do with the customers alone. Are you planning to expand the number of cross-selling partnerships you have? In insurance, we don\u2019t have any such plans. For NBFCs, we may get two-three more, at the most. We would like to build more committed relationships rather than having tie-ups with too many people. We are also working with three-four fintech companies on various technology platforms. These are functions concerning payment solutions and merchant-acquiring solutions. Have most of your deposits come from urban areas? They have come from both urban and rural. We have a 70% rural and 30% urban presence. The deposit distribution would be 50:50. Rural deposits are lower. Are you planning to expand your rural presence? We will be opening 100 new branches in FY19 and we will go beyond the states where we are present right now. Our rural presence is in four states and the urban presence is in 35-40 cities. I think by the end of FY19, four will go up to seven-eight. We\u2019ll not have very deep penetration. We\u2019ll have maybe a few pockets. Will the first touchpoint in these cases be a CASA deposit? It could be transactions or CASA. I am happy if you transact even without a bank account. Your remittances business has grown a lot and you seem to have benefited from the new KYC requirement for wallet users. Can you explain that? Before we became a bank, we were doing remittances only on our own platform and that business alone has seen 60% growth. In addition, we have done a lot of API integration with other players in the market. About 10 integrations have already been done. Now, 55-60% of remittances come from partner entities and about 40-45% comes from our own ecosystem. What is the segment-wise contribution to revenues? About 40% or so is coming from our old business correspondent (BC) business. Transactions and remittances contribute about 15-20%. The balance would be a mix of cross-sell, BC lending, etc. Will this change by the end of FY19? It will change. The BC business\u2019s contribution may come down to 30% or so. We should see a 50% growth in our revenue this year. Will you onboard mutual funds for cross-selling? In that space, we are still working on the product. We want to work on a more liquid kind of product for mutual funds, rather than an equity-based product because equity has a certain volatility and my customer may not understand why his principal has vanished all of a sudden. We will look at more principal-protected plans.