As Fino Payments Bank is set to start operations within the next two months, its CEO wants it to become the "D-Mart of banking".
"The more you complicate it, the more expensive it gets…We are looking at simplicity, a focused customer segment, keeping operating costs low… Remittance, CASA (current and saving account) deposits, insurance, bill pay, recharge, etc will be our core businesses for now. Internally, I tell my people we should be the D-Mart of banking," said Rishi Gupta, MD & CEO, FINO PayTech, which serves as the biggest business correspondent (BC) to various banks.
Fino PayTech, a financial service and solution provider which has been in the rural payments business for over a decade, got the final licence from the Reserve Bank of India (RBI) in March to set up a payments bank.
Amid the big players including Airtel, Reliance Industries and Vodafone, FINO PayTech is the only corporate banking correspondent involved in financial inclusion to have received the licence.
Incubated by ICICI Bank and backed by rich capital investors like BlackStone, Intel Capital and International Finance Corporation, Gupta says his peers or competitors are very different from FINO and while there is growth for all, the company doesn’t want to move away from its DNA, which is the mass underserved and underbanked segment, who want better service and convenience of services.
Founded in 2006, FINO has over 78 million customers transacting at 28,000 touch points and 10,000 agents in nearly 500 districts across 28 states in India.
According to Gupta, the bottom of the pyramid is ready to pay for more services while the top of the pyramid are unwilling to pay.
"We are passionate about the big mass market as it has good potential. This customer segment is asking for more services and are ready to pay… People with an annual income between Rs 1-5 lakh is my mass market," he said.
FINO’s target customers are low income households, small business owners, migrant workers, daily wagers etc, who send money to their families back home living in villages.
In order to expand the distribution, product and service channels, Gupta is tying up with players such as Bharat Petroleum, fintech players, NBFCs (non-banking finance companies) such as Reliance Capital, L&T Finance, more e-commerce firms apart from its existing partner Snapdeal and insurance partners ICICI Lombard for general insurance and ICICI Prudential and Exide for life insurance.
Profitable since 2010, FINO PayTech crossed revenues of Rs 320 crore in FY16. Currently, it does around 80 to 85 million transactions and handles around Rs 8,000 crore in cash through its platform every year. It has enrolled over 50 million people with banks of which 28 million are active.
Domestic remittance through urban Fino Money Marts and the retail networks are to the tune of over a million transactions every month at Rs 400 crore and annually close to Rs 5,000 crore.
Gupta said, "We plan to have 50 outlets per branch to allow payments to merchants so we are targeting about 20,000 access points with micro ATMs at the existing 400 branches (points) in the next 1-2 years, depending on the progress made."
On restrictions of lending and not more than Rs 1 lakh deposits, Gupta says FINO is used to working with boundaries. "The restrictions were always known to me. With a (payment bank) licence, it has only become better operationally.
"Yes, the boundaries can become bigger and I can get more flexibility especially on the deposit side as there could be some customers who would want to keep more deposits for which they would have to go to other banks. Some may also want loans from us and we could offer our own product than rely on universal banks," he said.
Gupta says they may look at going public with an IPO (initial public offering) after watching the bank's progress by December 2018 or March 2019.FINO has already hired over 1500 people in the last three months and plans to grow its business by about 35-40 percent this year.The Great Diwali Discount!
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