Gupta said that the bank will approach the Reserve Bank of India (RBI) for a small finance bank licence at an appropriate time, adding, the RBI guidelines stipulate that a payments bank more than five years old can apply for a licence for a small finance bank (SFB).
"So the natural migration for Fino from a banking licence point of view will be into a small finance bank. We have started to offer credit in partnerships with other players. We are also building a large customer and merchant base, which will come handy as we decide on SFB," Gupta said.
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"Having said that, right now we are internalising it. And once we close that communication and we believe that it is the right path or approach, then we will write to RBI for approval," Gupta added.
Though he agreed that it was difficult to give a timeline as of now, but the bank will take another few quarters to decide. Explaining fruther, he said that getting the final nod from RBI and the timeline for transition will add to the actual SFB operations.
Earlier in 2006, Fino started off as a payments technology company and gradually played a crucial role in the financial inclusion journey of India delivering services under the government's direct benefit transfer (DBT) services to the beneficiaries.
In 2014, Fino launched its domestic money transfer services, it received payments bank licence the following year and launched Fino Payments Bank in 2017.
Fino also distinguishes itself becoming the first profitable payments bank in 2020 and also the first in the space to be listed on bourses in 2021. It has now started off towards 'Fino 2.0' with 'digital banker' as a mainstay.
"From a strategy and execution point of view, it has been a difficult business model starting as a business correspondent (BC) to a payments bank. We believe we have done quite a good work in laying the foundation across the country which can be used for multiple services,"Gupta said.
Speaking about the current business scenario, he said the momentum has been good and the bank is seeing growth in customer ownership strategy.
"We are seeing good consolidation happening in our cash withdrawal products, Fino is almost a leader in the categories of business we are into. It is the first normal year after Covid and it has been a good year for us so far and we are seeing good growth in business.
"We expect it to continue and are already seeing good momentum in the festival month of October. So we expect that this momentum will build up as we move forward in the second half," said the official.
Customers now feel the ownership of their accounts as against just a transaction medium as they allow the money to sit in the account for a longer period of time.
"We are a payments company and our primary business is to facilitate transactions. People keep money in their accounts so that they can do transactions. But our average balance has gone up by nearly 50 per cent as people are becoming more comfortable in keeping higher balances. So the transaction led business is now turning to ownership like business such as CASA (current account savings account)," Gupta added.
In the first quarter ended June of the current fiscal year, the bank recorded a 223 per cent jump in net profit at ₹10.1 crore building on a revenue of ₹289.1 crore, up by 40 per cent from a year ago quarter.
In 2021-22, Fino Payments Bank had posted a net profit of nearly ₹43 crore, up by 109 per cent from a year ago. Total income during the year rose by 28 per cent to ₹1,009 crore.
With PTI inputs.
