Fino Payments Bank will create a digital banking and payments ecosystem around Bharat Petroleum Corporation Limited (BPCL) products, according to a Memorandum of Understanding (MoU) signed between the two companies. With this Fino Payments Bank will also be able to use BPCL outlets as business correspondent (BC) points, CEO and managing director Rishi Gupta said.

At BC points, people can remit money, deposit and withdraw cash, make payments for utility bills, recharging mobiles, and pay insurance premiums. Initially, the services will be available at BPCL outlets in six states – Uttar Pradesh, MadhyaPradesh, Bihar, Rajasthan, Tamil Nadu and Maharashtra. The services will be effective from the day Fino commences payments bank operations.

Note that BPCL is an investor in Fino Payments Bank and had picked up 21% stake for Rs 251 crore when Fino was trying to comply the Reserve Bank of India’s foreign shareholding guidelines for payments banks.

Betting on BCs

Fino Payments Bank currently has 30,000-35,000 BCs and plans to increase the number 50,000 by the end of the year. Business correspondents make a commission every time the facilitate a transaction such as account opening, cash withdrawal, cash deposit, cross-sell of insurance or recharges.

Fino is betting on its reach through these BCs to make its payments bank work. Though a payments bank cannot lend from its own books, BCs will be able to cross-sell loan products from other financial institutions. Gupta told MediaNama that the company has four sources of income. “One is the balances in the accounts. Second is the remittance business. The third revenue stream will be coming in from the BC and lending business. The fourth is the insurance cross-sell and other cross sales,” he said. “The revenue pattern will change over a period of time. You will see revenue coming in from the remittance and our existing BC business. In the long term, it will move towards CASA and cross selling products,” he added.