The firm plans to build a network of over 100,000 access points from 25,000 at present, and open more than 1,000 branches in 3-5 years
Fino Payments Bank, which launched its operations with 410 branches across 14 states, plans to break even in the next 24-36 months, according to managing director and CEO Rishi Gupta.
The firm, which has ICICI Bank, Union Bank of India, Indian Bank, Corporation Bank and Life Insurance Corporation of India (LIC), and Blackstone Group as its marquee investors, is the fourth payments bank to launch its operations after telecom major Airtel, government-owned India Post and Vijay Shekhar Sharma-founded Paytm, set out to go live earlier this year.
Capital of Rs 149 crore raised in January this year, from ICICI Bank's arms — ICICI Lombard and ICICI Prudential — and Rs 251 crore from Bharat Petroleum Corporation (BPCL) later, has gone into investments in expansion and hiring. It plans to close its fund raising with the balance Rs 150-200 crore in the next few months.
“The investments will affect our profitability for some time. Till last year, we were profitable but we have a loss this year and for another year or two, it will continue. We have opened a lot of branches, hired 1,500 people. We will make profits in about 24-36 months from now,” Gupta said.
Originally into domestic remittance, payments and business correspondence, Fino plans to acquire 3 to 4 million customers in the first year with an aim of increasing it to 50 million with a deposit base of Rs 10,000 crore in 5 years. It plans to gain expertise in domestic remittances and digital payments.
They plan to build a network of over 100,000 access points from 25,000 at present, and open more than 1,000 branches in 3-5 years. The payments bank will also launch its services on feature phones with USSD platform to expand its user base.
Fino has tie-ups with 10-12 banks and will be leveraging ICICI bank’s treasury services, analytics support, currency chests and also their ATMs.
Gupta says focus is required in the digital infrastructure space and it will happen with the government push.
Apart from the infrastructure, culture has been the biggest challenge for Fino. “A lot of people are added at a field level, so to build your company’s DNA with all the old people is a challenge. The culture in terms of frugality, team work, serving the customers, going to rural areas and working like it is your bank, that Fino culture needs to be built."
Adding current and savings account (CASA) is the biggest differentiating business for Fino. Gupta says, “That is the real addition to our core business. It builds our relationship and that’s the major change with this launch. We want to mobilise Rs 10,000 crore deposits within 3-5 years.“Banking is not an overnight business. For building trust, we have to have a physical outlet. So, we will have a proper look and feel of a bank...We will target customers who have not got good banking services so far. Those who prefer doorstep banking,” he added.