Fino Payments Looking To Upgrade So Small Finance Bank

Fino Payments Bank is keen to become a small finance bank after having completed five years of operations, Managing Director Rishi Gupta said.

The Navi Mumbai-based company is a subsidiary of Fino Paytech, which is backed by marquee investors such as Bharat Petroleum, ICICI Group, Blackstone, IFC, Intel and LIC, among others.

The company started operations in July 2017 with 410 branches to become the fourth payments bank after Airtel Payments Bank, India Post Payments Bank and Paytm Payments Bank.

Fino, which was a remittance service provider, has converted most of its Fino Money Mart outlets into bank branches after getting licence from the Reserve Bank.

Also, Fino is the only lender in this space being traded on the exchanges.

”From regulatory and compliance perspectives we are eligible for an upgrade to a small finance bank, having completed the mandatory five years of operations. Our board also favours such a conversion and soon we’ll be moving an application with the RBI in this regard,” Gupta told PTI.

On why to stop at small finance bank, and not a full service bank, Gupta said, the company is too small to directly convert to a full service commercial bank from capital and capabilities perspectives.

He said, till the upgrade happens, the bank will grow the business with a focus on tie-ups with fintechs under the Fino 2.0 initiative on building digital assets and strengthen the digital offerings.

Already, it has tied up with the Sequoia Capital-backed Hubble to offer a spending account, offering customers better value on their lifestyle spends.

People can park their funds, spend and save up to 10 per cent on all purchases made from the account.

”We’re looking at more such tie-ups in the fintech space,” Gupta said, adding the company is also tying up with NBFCs from retail lending as payments partner and such loan remains on the book of the NBFC.

”We’ve already tied up with two such shadow banks—Kredbee and Myshublaon,” he said.

In Q4FY23, its revenue rose 13 per cent to Rs 323 crore and net income jumped 25 per cent to Rs 22 crore with net margin rising to 6.8 per cent from 6.2 per cent.

Its deposits grew 66 per cent to Rs 1,200 crore in FY23 from Rs 724 crore in FY22 of which 20 per cent are the low-cost Casa deposits.

Gupta said the bank has been adding 2.5 lakh customers monthly on an average in FY24, taking the overall customer base to 71 lakh now.

Another new service they began is offering recurring deposits, he said, adding the bank is also working on launching a virtual debit card. Also, under the pipeline is gold loans, mutual funds and medical insurance, Gupta said.