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A file photo of Rishi Gupta, managing director and CEO of Fino Payments Bank. Photo: Aniruddha Chowdhury/Mint
A file photo of Rishi Gupta, managing director and CEO of Fino Payments Bank. Photo: Aniruddha Chowdhury/Mint

Fino Payments Bank to double business correspondent network by next year

Rishi Gupta, managing director and CEO of Fino Payments Bank says expansion of distribution network is the one of the ways to scale up and reach 50 million customers over the next 5 years

New Delhi: Aiming to expand its customer base largely from under-banked rural areas, Fino Payments Bank plans to double its business correspondent (BC) network by next year.

The bank has set the target of scaling up the 25,000 BC points present across the country to 50,000 points by the next year, Rishi Gupta, managing director and CEO of Fino Payments Bank said in an interview.

“There will be around 75,000 BC points in total by next year, out of which 50,000 points will work for Fino Payments Bank and 25,000 points will work for other banks we have tied up with," he added.

Gupta said expansion of distribution network is the one of the ways to scale up and reach 50 million customers over the next 5 years. The bank claims to have a 0.4 million customer base.

A business correspondent is an approved bank agent providing banking service using a micro ATM. The agent needs to maintain a prepaid account with the bank and replenish it according to the level and amount of transactions it facilitates.

These access points also act as points of trust and the bank’s aim is to reach unbanked areas through its BC network, said Gupta.

Gupta said the bank is largely targeting the mass market customers who earn between Rs1 lakh to Rs6 lakh annually, including low income households, small business owners, migrant workers etc.

“Right now, we are adding 5,000-6,000 customers per day through our branch network and we are looking to scale it up to 10,000 customers per day in the next three months," he said.

Other than banking services, some of these BC points also offers bill payments, loan products and insurance products and mutual funds.

Fino Payments Bank aims to reach break-even in the next two years. “We are aiming to break even next fiscal at the holding company level and are confident that at the bank level, break-even will be achieved in the year after next," said Gupta.

Currently, the bank processes transactions worth Rs80 crore a day and plans to handle Rs100 crore by March.

Fino which was a remittance service provider received the authorization from the Reserve Bank of India (RBI) to operate as a bank in March 2017. It started operations in September after its launch in July last year.

The bank customers have to maintain Rs1,000 as minimum balance requirement and offers 4% interest on savings deposits. India has three other operational payment banks—Airtel Payments Bank, India Post Payments Bank and Paytm Payments Bank.

Fino PayTech, the parent company, had raised Rs400 crore for the bank’s launch, and plans to raise another Rs200 crore for expansion in the coming years, a statement from the company said.

The bank has a network of 422 branches and 25,000 access points spread across 14 states.These access points are in addition to the corporate BC agents that provide services for other banks.

“The business correspondent network to reach the unbanked geographies has its own challenges. These are areas where mindset needs to be changed as people are comfortable using cash for transactions," said Ashish Aggarwal, a consultant at the National Institute of Public Finance and Policy. “Selling investment product to the target segment is not easy. Getting them to move to digital banking will be challenging," he added.

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