Fino Payments Bank, which received a final license from the RBI for the launch in March, is now live with 410 branches across 14 states and a network of 25,000 banking points. It will offer banking services such as current & savings accounts, remittances, business correspondent (BC) lending, mobile banking through the BPay app, life & general insurance and bill payments. Fino had commenced operations internally towards the end of last month, and has now gone public. Following its launch, Fino has become the fourth Payments Bank in the country, after Airtel, India Post and Paytm/Vijay Shekhar Sharma.
Earlier this year, Fino Payments Bank CEO Rishi Gupta had told MediaNama that he sees four sources of income for the payments bank business: “One is the balance in the accounts. Second is the remittance business. The third revenue stream will be coming in from the Banking Correspondents and lending business. The fourth is the insurance cross-sell and other cross sales.” Note that at the end of April 2017, the average amount in Fino’s remittance business was around Rs 4,000 to Rs 5,000, and they charged around 1% of the amount sent for the service.
Gupta had also mentioned that Fino’s business model doesn’t support high interest rates, so they will offer interest rates of around 4%. Currently, Airtel Payments Bank offers one of the highest interest rates on deposits at 7.25 % per annum for savings accounts.
Fino has also partnered ICICI Bank to set up ICICI ATMs at the branches, along with selling ICICI banking products including term deposits, retail loans including home loans, loans for Joint Liability Groups (which provide institutional loans to small farmers) and Micro, Small and Medium Enterprises, and cross border remittance services among others. In this context, it’s worth noting that Fino had partnered National Bank for Agriculture and Rural Development’s (NABARD) to deploy 5,000 Aadhaar-enabled micro ATMs across villages in Haryana, Madhya Pradesh, Bihar, Gujarat and Maharashtra as part of NABARD’s push for rural banking.
Also note that in April, Fino had signed an MoU with Bharat Petroleum Corporation Limited (BPCL), which owns a 21% stake in Fino, to set up a digital banking and payments ecosystem using BPCL outlets in six states – Uttar Pradesh, Madhya Pradesh, Bihar, Rajasthan, Tamil Nadu and Maharashtra – as BC points.
Fino had raised Rs 149 crore in funding from ICICI Prudential Life Insurance and ICICI Lombard General Insurance among other investors, in January this year. This and the earlier stake sale to BPCL mentioned above were done to reduced its foreign shareholding to below 50% to comply with the Reserve Bank of India’s guidelines for a payments bank.