Fino Payments Bank sees rise in applications for BC points

Notwithstanding the sluggish economic activity, Fino Payments Bank is witnessing a surge in applications from those wanting to act as banking correspondents in rural India since the lockdown began, a top official has said.

This can be due to renewed attempts at spotting income supplementing opportunities by rural households or also due to the high incidence of migration back to the villages, where the returnees are looking for income generation opportunities.

"This is the start of entrepreneurial journeys for many. The enquiries and applications which we are getting for 'BC Point' is increasing," chief executive and managing director Rishi Gupta told PTI.

He said as against about 600 such enquiries earlier, the company is now getting 1,000 enquiries.

A Business Correspondent (BC) Point is typically equipped with a handheld device like a smartphone or a tablet, along with peripheral finger print reading machine. Through the hardware and connectivity, it delivers a host of banking and financial services to the local people against a commission for every transaction like remittances and also cash withdrawals.

Typically, a person has to invest over Rs 7,000 for the hardware and connectivity and is helped by the company to render the services after being trained and some necessary marketing material given, Gupta said, adding that it has 2 lakh such BC Points manned by external partners as of now.

We do a background search on the applicant, check the potential of the area he would be operating in before onboarding, Gupta said, adding the work of adding the new partners is on.

The BC point has business earning potential of about Rs 6,000 per month, assuming for doing about 200 transactions a day, Gupta said, adding that typically, the business operator also has other interests like photocopying or phone recharges.

Meanwhile, Gupta said the cash transfers by the government under various schemes like PM-Kisan have ensured that activities like remittances, which had been impacted in the initial days of the lockdown, have re-started now.

The bank is now witnessing remittances of Rs 1,500 crore per month as against a low of about Rs 400 crore, he said.

Similarly, deposit withdrawals have also increased with the accounts witnessing some deposits from the government, Gupta said, adding the rate of new account opening is also up.

Gupta said the bank, which turned in the black in the March quarter, will close FY21 with profits and is also sticking to its aim of turning itself into a small finance bank in two years.

In the current times, the payments bank is the best business model because it is a risk-free business, Gupta said.