Interview | Fino plans to almost triple deposits to Rs 3,500 crore by 2026

We are aiming for a deposit base of Rs 3,500 crore by March 31, 2026. Our total deposits grew 66 percent YoY from Rs 724 crore at the end of March 2022 to Rs 1,200 crore on March 31, 2023. We are witnessing an increase in account balances of customers who transact digitally. As we add more customers, with most of them being digitally active, we expect to have a healthy CASA (current and savings accounts) deposit growth.

Have you approached the Reserve Bank of India to ease lending norms?

Over the years, various industry representations have been made to the regulator to relax certain payment bank guidelines. Allowing microcredit or small-ticket loans is one of them, the other being increasing the end-of-the-day deposit limit from Rs 2 lakh.

What is the progress on your small finance bank plans?

Six years ago, on June 30, we commenced payment bank operations. The journey so far has been challenging as well as rewarding. We created an extensive phy-gital distribution network covering 94 percent of the districts that takes banking to customers’ doorsteps. We believe there is great potential to explore the payments space itself and within the guidelines. We are in a good space to grow further.

However, converting into an SFB is an option the regulator has provided to some payment banks. With credit as a product offering, there will be a positive impact on customer engagement and overall business. In this context, we have the intent and are working internally on it. We have not put any timeline for applying, though.

How was FY23 in terms of revenue, profitability, and user base? What are your targets for the next financial year?

Our performance in FY23 has been remarkable. We recorded the highest-ever revenue with Rs 1,230 crore, growing 22 percent over FY22. Furthermore, it’s the highest profitable year since the inception of the bank with profit after tax at Rs 65.1 crore, up 52 percent over FY22.

We aim to continue growing at 20 percent YoY, focusing on customer ownership and transactions. At the current run rate of adding approximately 2.5 lakh new customers every month, we expect to have a CASA customer base of over 1 crore (10 million) by end of this fiscal.

How many customers use UPI (Unified Payments Interface) and other digital modes?

Around 65 percent of our transacting customers are active on UPI. The secular uptick in our account subscription/renewal rate points to customers’ preference to bank with us. It is the result of higher engagement/account adoption.

In FY23, our transaction throughput grew 36 percent to Rs 2.55 lakh crore. An indicator of changing customer behaviour, digital (through debit card or UPI) contributed 19 percent to the overall throughput, up from 10 percent in FY22.

How are you coping with the competition?

The market is big with a lot of opportunities and therefore it is important to have more players to reach out to different customer segments.

We have largely been a rural-focused bank catering to a segment of customers that prefers assisted services. Now, the focus is on making ourselves future ready and for that we are strengthening our digital footprint through the Fino 2.0 initiative. Since FY22, we made significant strides on the digital side.

Our endeavour is to engage with a new set of digitally and smartphone savvy customers with a range of innovative offerings. We keep it simple through our STP (segmentation, targeting, positioning) model. We segmented the market. We are clear on whom to target. We are perfectly positioned for that target segment as the fikar-not bank.