Fino PayTech to raise $60-80 m for rollout of payments bank service

Fino PayTech, one of the recipients of payments bank licence from the RBI last fortnight, has begun talks with private equity and strategic investors to raise fresh capital, its Managing Director and CEO Rishi Gupta said.

“We are initially looking at around $60-80 million. We have yet to work out the finer details. We will make provisions in case any more investment is required as we execute and expand the payments bank operations,” he added.

The company is also in the process of hiring a consultant to lay a road-map for operationalising the licence. All new licencees are expected to get about 18 months to begin operations. The RBI has granted these licences as part of an experiment to further financial inclusion of the unbanked.

Asked about hiring plans, Gupta said that it will not be very big to start with. A couple of specialist appointments in the domain of technology, compliance and risk management may be made during the course of the next few months, he said.

Currently, the company has around 3,000 employees on its rolls and operates about 450 branches spread over 14 States across the country. These outlets will be converted to bank branches with necessary modifications in accordance with RBI requirements, Gupta said.

Although a payments bank cannot lend, it can offer a variety of other services, including offering mobile recharge, utility bill payments, ticket booking, insurance distribution, and assisted online shopping. All these are already being offered at Fino’s 450 money mart branches, Gupta said.

Fino PayTech, which has hitherto functioned as a banking and technology platform as also a distribution channel (through banking correspondent relationships) for a host of banks, will now be able to “own the customer,” he said.

While many other aspirants have telecom or technology background, Fino PayTech has experience in financial inclusion, Gupta said. “The payments space is in our DNA and we have experience in providing last mile access. We intend to stick with it,” Gupta said.

It currently serves nearly 80,000 villages and is able to put through in a month seven to eight million transactions and cash transfers of nearly ₹600 crore. These include government pension payments, MNREGA payments, remittances, microfinance payments, and cash management services for companies.

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