New Delhi: In an attempt to expand their consumer base and carve out their own individual identity , Fino Paytech—one of the entities to receive in-principle approval from the Reserve Bank of India (RBI)—will focus on areas having maximum domestic remittances to extend its banking services.
Fino, which is expected to launch its payment bank operations soon, will provide services like basic banking products such as withdrawal and deposits as well as third-party products like insurance and remittances while continuing to serve their primary responsibility of a technology-solution provider and banking correspondent (BC) to other banks.
With a target of opening 400 bank branches across 30 cities on its opening day, Fino will also provide the basic services of account opening and cash withdrawal in additional 15,000 access points outside these branches.
Another 15,000 petrol pumps and liquified petroleum gas (LPG) outlets, where Fono already has a presence due to its partnership with Bharat Petroleum Corporation Ltd (BPCL), will also be incorporated in the exercise.
“Among the 400 branches, 100 of them will belong to rural areas and rest in urban areas. Maharashtra, Madhya Pradesh, UP and Bihar are the four states, which will be part of this initial pilot. The top 30 cities belonging to these five states have been chosen in terms of the highest number of domestic remittance transactions," said Shailesh Pandey, executive vice-president, Fino.
In order to supply the third-party products, Fino has tied up with a lot of companies.
“Our tie-up with BPCL will help enhance out our physical infrastructure and reach. We have also tied up with ICICI Bank as partner bank that allows to offer ICICI’s banking products to our customers, for insurance we have ICICI Prudential and Lombard and for international remittances we have tied up with Western Union, Express Money, Transfast etc, “ Pandey added.
Fino will also keep the interest rate on its deposits within the current market range of 4-5%. Currently, only Airtel and India Post have started their payment bank operations.
India Post Payments Bank (IPPB) has offered a maximum interest rate of 5.5 %, whereas Airtel is offering a higher rate of 7.5% on deposits. Besides these two entities, Paytm has also been given a payments’ bank licence by the RBI, and is expected to commence its operations this month.
“Fino Payments bank will be completely paperless. We will use Aadhaar based solutions to open bank accounts, do know your customer (KYC) and facilitate transaction," Pandey added.
Payment banks, unlike full fledged banks, do not offer loans and several other facilities. Also, they are not allowed to accept deposits over Rs1 lakh.
In 2015, 11 companies had received an in-principle approval from the RBI to offer payments bank services.
Of these, three—Chalomandalam Distribution Services, Sun Pharmaceuticals and Tech Mahindra—have surrendered their licences. The other entities—Aditya Birla Nuvo, National Securities Depository, Reliance Industries Ltd and Vodafone m-pesa— are also expected to roll out their services soon.