As the first player to have launched the beta version and after having conducted successful field tests, Fino Paytech is bullish about starting its payment banking operations by the fourth quarter of the current financial year 2016-17.
The payment bank licensee is awaiting RBI approval of its tie-up with state-run Bharat Petroleum Corporation Limited (BPCL) which has acquired 21 per cent stake in Fino Paytech, Rishi Gupta, MD and CEO of the company told Business Standard.
"We have already launched beta version and are now conducting field testing which is 95 per cent ready. In terms of funding, we have applied to RBI for approval after our tie-up with BPCL who has acquired 21 per cent stake in Fino Paytech. By the fourth quarter, we should be able to launch the payments bank. We are already the first payments bank to launch beta version and most of our infrastructure is ready," Gupta said.
Annually, Fino Paytech has a gross transactions value worth Rs 12,000 crore which generates a revenue of Rs 300 crore, a business it expects to see migrate to its payment banks business.
The company is awaiting the RBI approval for the stake sale through it intends to raise funds for capital. As against the RBI requirement of Rs 100 crore paid-up equity capital, Fino Paytech is raising around Rs 400 crore. "We are raising Rs 400 crore and the funding is already tied up for the same, subject to RBI approvals. We will have physical and digital presence, wherein we will have 400 physical branches all over the country," Gupta added.
Currently, Fino Paytech operates through two lines of business including corporate and retail wherein the latter has a lending portfolio of Rs 600 crore.
"Under our business correspondents segment, we used to disburse Rs 150 crore per month which we are now doing at around Rs 500 crore per month. Our lending business will grow 2.5 times this year from Rs 325 crore to Rs 850 crore and our remittances is growing by 7-10 per cent per month. Right now we handle Rs 400 crore worth throughput per month through million transactions," Gupta further commented.
With the payment banking license allowing it to foray into liabilities by offering deposit facilities, the company is looking to tap its existing network as well as acquire new customers post launch. Moreover, as part of offering deposits, the company is also looking at issuing RuPay debit cards.
"We are still working on tying up for payment gateways. There are around 8-10 major gateways such as PayU, Citrus and CCAvenue, among others. We have a tie-up with RuPay and may look for more tie-ups later. We already have 5-6 million customers on our platform for remittances which we should be able to convert into deposits and ATM cards in near future," said Gupta.
Commenting on the payment banking operations, Gupta said, "Our objective is to bring in convenience and simplicity, to bridge the services gap and build on it for our customers to avail the services and for our employees to provide the same. Our target customer group will be people deprived of good banking services. There is a better requirement among lower income and middle income groups. On our part, we have not only tied up for core banking services but also building our own in-house app for payment banking services. Going forward, technology will be the driver for any bank."
Currently, Fino Paytech has around 20,000 BC points in rural areas and 10,000 in urban areas, which it intends to take up to 100,000 in next five years.