Home / Companies / News /  Finin launches as neobank in India in partnership with SBM

MUMBAI: Finin, a fintech company, has launched itself as a ‘neobank’, in partnership with SBM Bank, a wholly-owned subsidiary of State Bank of Mauritius in India, focussing on saving rather than lending.

In a press conference held on Wednesday, it put forth data analytics as its USP. Finin said it will provide features such as detailed break-up of user spending and send prompts if they exceed pre-set limits and automatic sweeps of money into liquid funds. The bank will target white-collar workers and freelancers and has waiting list of 15,000 people before launch. It aims to open 50,000 accounts in six months.

Also Read: India Can’t Make Up Its Mind On PSUs, 30 Years After Liberalisation

Neobanking as a space already has incumbents such as Niyo which has a tie up with IDFC First. Finin has secured funding from Unicorn India Ventures, PointOneCapital, and Astir Ventures in a pre-Series A funding round, a press release issued by the company said.

“No RBI permission is required to use the term neobank in India," said Suman Gandham, founder and CEO, Finin, in response to a question from Mint. “Data of customers will be held in India in compliance with applicable laws," he added. However, Gandham did not map specific ways in which the company will make money, simply stating that it will study users and then take a call. According to Gandham, Finin will bank more on revenue from wealth management operations rather than lending fees. These wealth management operations will include products like mutual funds and insurance.

SBM Bank offers an interest rate of 5% for saving account balances below 5 lakh and 6% for anything higher than that. It offers FD interest up to 7.5% for terms of 2-3 years, a shade higher than larger peers. This is likely to be a key pull factor for Finin.

On the flip side, customers will have to rely on the SBM Bank branch network for banking activities that need physical branch presence. According to the SBM website, branches at present are confined to New Delhi, Mumbai, Chennai, Bengaluru, and Hyderabad.

ABOUT THE AUTHOR

Neil Borate

Neil heads the personal finance team at Mint. A former colleague called them 'money nerds' and that's what they are. They cover topics like mutual funds, taxation and retirement, all to improve your chances of building wealth. Neil graduated with a degree in law and economics. He passed the CFA Level I exam and began his writing career at Value Research, a mutual fund research firm in 2016. He joined the personal finance team Mint in 2019. Everyday, the Mint Money Team tackles personal finance questions such as where to invest and where to borrow, through articles, charts and reader queries. They also have a daily podcast - 'Why Not Mint Money' and an annual ranking of mutual funds - the Mint 20.
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