Fino Payments Bank (FPBL) is focusing on producing itself larger and has “no rush” to convert itself into a little finance bank (SFB), as it does not want to get into the higher-threat lending business enterprise appropriate now amid the Covid pandemic.
The bank will determine on converting itself into an SFB soon after the Reserve Bank of India comes up with the distinct recommendations and the general banking ecosystem, specifically the asset side, stabilises.
“Right now, if you ask me, lending businesses are going through their own pain. Especially, small finance banks are facing challenges because of the microfinance portfolio. So, we will have to see how the lending business changes post pandemic. And, as a payment bank, we are doing quite well. There is no lending risk as such, which is good,” Rishi Gupta, MD & CEO, told FE.
“As of now, we are satisfied with what we are doing. And, we want to grow this. We will have to wait for both the guidelines on licensing to come as well as the post-Covid things to stabilise on the asset side. Only after that something we will decide,” Gupta pointed out.
Last month, the RBI doubled the maximum limit of funds account holders of payments bank can preserve in their accounts to Rs 2 lakh. “We are quite happy. The RBI’s measure will help us provide more services to our customers. Right now, we are quite satisfied with the payments bank and our focus is to make it bigger and better. We are not looking at any change in the asset side as of now… Asset has become more high risk business right now,” the MD stated.
FPBL had turned lucrative at the operating level in FY2019-20. “Since then, the profit and income have been growing in every quarter,” the MD stated, adding in the last 4 years the bank’s volume of business enterprise grew by 9-10 occasions. At the finish of March 2021, month-to-month total worth of transaction, like each digital and non-digital modes, was about Rs 14,000 crore compared to Rs 8,500 crore in the year ago period.
“Our monthly transaction figure was down in April because of the second Covid wave and lock downs. Figure in May is better than April. And, I think as the number of new infections continues to drop, more people start recovering and getting vaccinated, the number will start to grow again. Payments banks will not be negatively impacted because of the Covid,” Gupta stated.