2 min read.Updated: 21 Oct 2020, 08:34 PM ISTSalman SH
According to RBI data, currently there are more than 54 million active credit cards
BankBazaar is also witnessing a growth in number of users purchasing home loans, as interest rates have dipped to a 15-year low
Online financial services marketplace, BankBazaar is looking to close financial year ended 2020-21 (FY21) with operational profitability on the back of strong demand for credit cards and housing loans after missing profitability target set for FY20, said a top company executive.
BankBazaar had expected making an operating profit by the end of March 2020 (FY20) and launch an initial public offering (IPO) by fiscal 2022, but postponed these targets as coronavirus-led disruptions slowed the pace of revenue growth in the financial services segment.
Even though the Reserve Bank of India (RBI) stipulated a 6-month moratorium on repayment of loans which ended on August 31st, the online marketplace said that its monthly revenues are getting back on track, and are trending at 70% of the peak pre-Covid monthly revenue.
From October 2019 and February 2020, BankBazaar’s revenues had been on an upward streak, which grew 54% while cutting down expenditure by 15% during the same period.
On March 2020, the RBI had allowed banks and financial institutions to provide a three-month moratorium on all term loans, which was later extended by three additional months. During the first three months, several startups in the online lending and financial services segment raised concerns over the moratorium, but demand for credit seems to have recovered faster than expected.
According to Adhil Shetty, chief executive officer (CEO), BankBazaar Indians began going to saving-mode after the lockdown in March, but later started picking up new credit cards, and while existing card holders also intensified their credit card spending.
“This (increase in credit card spending) is because people are now buying online more, especially on e-commerce platforms. So, across all our existing financial product categories, the fastest bounce back in demand is happening on credit cards. Most people are not able to step out to a restaurant or to a supermarket and for movies, and hence all of that spending has moved online," Shetty added.
According to RBI data, currently there are more than 54 million active credit cards. Shetty pointed out that most credit card issuers are now banking on the on-going e-commerce festivities for raking in new customers. Apart from credit cards, BankBazaar is also witnessing a growth in number of users purchasing home loans, as interest rates have dipped to a 15-year low, according to Shetty.
He added that around 80% of the purchases of new credit cards and loans products on BankBazaar are now being processing via video-based KYC option which allows users to validate their documents and credit scores without physical meetings with the bank agents. This was made possible after the RBI laid down detailed operating guidelines on January 2020 for regulated entities to perform video-call KYC instead of customers physically verifying their identity at offline branches.
For the fiscal ended March 2019, BankBazaar reported revenue at ₹109.3 crore, a 12.4% YoY rise, compared to ₹97 crore in FY18. Its losses also increased to ₹169 crore in FY19 from ₹130 crore in the previous financial year.
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