Fino Payments Bank turns a profit in March quarter

Fino Payments Bank, IMPS business, Micro ATM, Paytm,india post, Micro ATM, AadhaarFino Payments Bank MD & CEO Rishi Gupta said not having an asset product makes the payments bank model risk-free.

Fino Payments Bank on Wednesday said it turned a profit in the March quarter of FY20 and an operating profit on a full-year basis. The bank did not share profit figures. Its revenues stood at Rs 689 crore for the year.

During FY20, Fino Payments Bank facilitated transactions worth over Rs 1 lakh crore, doubling on the previous fiscal’s throughput. In terms of volumes, transactions grew to over 380 million from 195 million in FY19.

For the bank, domestic remittance (urban to rural) transactions accounted for over 40% of the FY20 throughput, placing it among the top five players in the IMPS business. Micro ATM and Aadhaar enabled Payment System (AePS)-led digital transactions (withdrawals) contributed over 30% to the business.

The interoperable digital platforms allowed customers of all banks to transact at Fino points, leading to a quadrupling in withdrawals over the last fiscal. The bank’s current account savings account (CASA) customer base increased by over 65% in FY20.

Fino Payments Bank MD & CEO Rishi Gupta said not having an asset product makes the payments bank model risk-free. “We worked towards turning this perceived liability and a payments-only model into an asset. Our strategic focus on having a lean variable cost model riding on digital platforms, increasing transactions and high margin-products enabled us to grow by over 86% in FY19-20,” Gupta said.

Like its rivals in the payments bank space, Paytm and India Post, Fino had last year spoken of plans to transition to the small finance bank (SFB) model. Thereafter, RBI in December 2019 came out with norms stipulating that a payments bank must have completed five years of operations to be allowed to turn into an SFB.

Earlier this week, Gupta told FE that Fino will need a few more years to see how the ‘new normal’ works out in the wake of Covid-19 and how that may impact a foray into lending.

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