Fino Payments Bank is looking to increase its penetration in the eastern, north-eastern and southern markets, primarily through the merchant acquisition model. It is also looking to strengthen its presence in Bihar and Uttar Pradesh, where it has been witnessing a surge in demand following the reverse migration due to the Covid-19 pandemic.

Plans are also afoot to roll out loan products in tie up with banks and lending institutions. The bank already offers gold loan to its customers in tie up with ICICI Bank. It is now exploring the possibility of rolling out merchant loan and personal loans.

“Our strategy, going forward, is to go deeper into north-east and eastern region, and also markets such as Tamil Nadu and Karnataka where our presence has not been too high. This apart, there has been a surge in demand for our services in markets such as Bihar and UP where migrants have moved back during this pandemic. We are trying to identify those pockets and move in that direction,” Shailesh Pandey, Chief Sales Officer, Fino Payments Bank, told BusinessLine .

Fino, which primarily has presence in semi urban and rural markets, including Tier IV, Tier V and Tier VI cities, has been witnessing a surge in banking services on the back of the Covid-19 pandemic. With the various government aids flowing into bank accounts of beneficiaries, there has been a “deluge of money flowing” into the rural markets.

Expanding network

The reverse migration of migrants to villages has also led to a surge in demand for distribution network. Fino, which used to add 8,000-10,000 merchants a month, has added more than 45,000 merchants in the last three months.

“Suddenly banking in the rural space has become a core necessity, and that is where we have seen a pick-up in demand for distribution,” he said.

Fino, which has its own network of around 2.25 lakh merchants at present, is looking to add another 1.5 lakh merchants to take it to 3.5 to 4 lakh by March 2021. It is also looking at reorganising its branch network by shutting down branches in some locations and opening up in another location. It has close to 300 brick-and-motor outlets, and the number of branches will remain more or less constant at current levels by the end of this fiscal.

“We initially had branches so as to create a comfort in the minds of consumers. It has been three years since we are in operations, and now we have come to a stage where consumers know us, so going forward, we do not need too many branches as the cost of operating it is higher. In terms of delivery of service, the merchant acquisition model is more efficient and is also cost effective,” he said.

Growing business

During April to mid-June this year, Fino opened more than two lakh CASA accounts. It expects to end Q1 FY21 with 2.4 lakh new accounts and an overall customer base of around two million.

The bank’s network, 80 per cent of which is in rural areas, facilitates more than 35 million transactions valued at over $ 1 billion a month.

According to Pandey there has been close to 2.5 times surge in the volume of transactions, spurred by a higher need for cash withdrawal in rural and semi-urban markets.

While the growth rate on a month-on-month basis would come down moving forward, however, the absolute numbers would not decline.

Talking about a possible tie-up with other banks and lending institutions for rolling out more loan products, he said: “We are running a few pilots with some partners, we want to have all tie ups ready and roll out products possibly by next year.”