Fino Payments Bank in no hurry to convert into small finance bank

Right now, the payments business is evolving quiet well. We recorded a 28 per cent year-on-year (y-o-y) growth in revenue in FY22 despite Covid-related challenges…So, let us see how this business evolves over the next couple of years. There are multiple products for which we received regulatory approvals in the last 3-4 months. So, we will be launching them in the current financial year….So, we are taking it [business] as it comes, there is no hurry [to convert into an SFB]. My view is that lending is like maal gaadi’ (goods train) business…you need to move slowly so that there is no derailment. But payments and liabilities are like bullet train business, you only need to manage the operational risk; there is no credit risk.

Conversion into a SFB is an open question in our mind. Our [payments bank] business model has been built on the fact that at higher levels of transactions, we will be able to survive and make money. Now, the question is when we already have an established business and there is an opportunity within it to grow, do we, at this stage, disrupt that business and bring in lending on which we absolutely have no knowledge?” So, we would prefer to let our business reach a level, where we feel that it is at a level where we should now look at more opportunities. We have already started some work with non-banking finance companies (NBFCs) and banks, partnering with them on the lending side to understand the lending business, to see how it can be useful to our customers. So, we will gain some knowledge, understand the market better.

Low fixed charges and low operating costs are the key to our success…I think, we have been able to prove that if you have the right business model, focus properly on the business, target the right customers, understand them, and offer them suitable products and services, the customer is ready to pay. The fact that people are ready to pay for payments business proves that there is a business model to it. Just because a business doesn’t want to charge doesn’t mean that a customer does not want to pay. If you don’t want to charge for transactions then people will be happy doing more and more transactions. But the moment you start charging, some people will drop, but others will continue. Once people see the convenience, reach, accessibility, ease of doing transactions and value being offered by businesses, then they are ready to pay a small amount. Our ability to manage our business within that small amount is the key. We believe in keeping our head down and having our feet on the ground.