RBI guidelines state that a payments bank that is more than five years old can apply for a license for a small finance bank (SFB). Gupta Told.
“So from a banking license point of view the natural migration for Fino would be to a smaller finance bank. We have started offering credit in partnership with other players. We are also building a bigger customer and merchant base, which will come in handy when we are. Let’s decide on SFB.
Gupta told PTI-language, “Having said this, right now we are internalizing it. And once we stop that communication and we are convinced that it is the right path or approach, we Will write to RBI for approval.”
However, he said that it is difficult to give a timeline at the moment, but we will take a few more quarters to decide. Nevertheless, the timeline for final approval and transition from RBI will be added to the actual SFB operations, he added.
Fino started as a payments technology company in 2006 and gradually played a key role in India’s financial inclusion journey by providing services to beneficiaries under the Government’s Direct Benefit Transfer (DBT) services.
After launching its domestic money transfer services in 2014, Fino obtained a payments bank license the following year and launched Fino Payments Bank in 2017.
Fino has positioned itself to become the first profitable payments bank in 2020 as well as the first payments bank to be listed on exchanges in 2021. Now it has started towards ‘Fino 2.0’.digital Banker’ as a mainstay.
“From a strategy and execution standpoint, starting out as a Business Correspondent (BC) for a payments bank has been a difficult business model. We believe we have done a pretty good job in laying the foundations across the country. which can be used for multiple services,” Gupta said.
On the current business scenario, he said the momentum has been good and the bank is seeing growth in customer ownership strategy.
“We are seeing good consolidation in our cash withdrawal products, Fino is almost the leader in the categories of business we are in. This is the first normal year since covid and it has been a good year for us so far and we are seeing Good growth in business.
“We expect this to continue and the festive month of October is already witnessing good momentum. So we expect this momentum to pick up as we move into the second half,” the official said.
Customers now feel the ownership of their accounts only as a transactional medium as they allow the money to remain in the account for a longer period of time.
“We are a payments company and our primary business is to facilitate transactions. People keep money in their accounts so that they can transact. But our average balance has increased by about 50 percent as people are more comfortable with keeping higher balances. So the transaction based business is now turning into ownership like a business like CASA (Current Account Savings Account),” said Gupta.
In the first quarter ended June of the current financial year, the bank reported a 223 per cent increase in net profit of Rs 10.1 crore on revenue of Rs 289.1 crore, up 40 per cent from the year-ago quarter.
In 2021-22, Fino Payments Bank had posted a net profit of around Rs 43 crore, which is 109 per cent higher than a year ago. The total income during the year grew by 28 per cent to Rs 1,009 crore.
The Bank provides financial services like Direct Remittance, Doorstep Banking, Micro ATM/Debit Card Services, CASA, etc. third party Cross-sell products such as insurance and tickets.
Going forward, cross-sell products should form a major part of the bank’s bottomline, Gupta said. It is like a bottomline (profit) strategy.
“Cross-sell is a profit product for me. At Fino Payments Bank, we are already a profitable entity. Cross-sell products are a further boost to my profit”. Fino is also investing heavily in technology and the bank is building a digital team.
“We are strengthening our digital footprint by creating an ecosystem. To this end, we are committed to investing in digital footprints and being ahead of the curve to drive digital penetration into our target audience. Technology and Digital at H1FY23 The expenditure has been around Rs 21 crore. And we will continue to explore opportunities,” Gupta said.
Moreover, as the increasing digital transactions in the country have allowed is i To be the preferred option, Fino expects the share of UPI to increase. “UPI transactions are growing significantly. Last year it was 10 per cent of our total volumes and I expect it to exceed 20 per cent. Digital transactions have instilled confidence in the business ecosystem that Fino has built for customers. ” Fino MD and CEO said.
There were 17.2 lakh accounts active on UPI at the end of June 2022 quarter. The total number of accounts opened was 52.1 lakh. It had over 11.42 lakh merchants on its network as of the end of the first quarter of 2022-23, with an exclusive kirana store owner as a merchant point for Fino to deliver banking services.