IPO-bound Fino Payments Bank is betting big on technological innovation and customers beyond tier-2 towns to fuel its future growth.

“While innovation remains ever-present, technology and customer trust lies at the core of all that we do and forms the foundation for our entire business model. We have and will continue to strengthen our focus within ‘emerging India’, catering to a population that we believe presents a large market opportunity and has typically been overlooked by the majority of the large Indian financial institutions,” Fino Payments Bank has said in its draft red herring prospectus, adding that this section of society is often underserved and typically does not have access to basic banking services.

Training merchants

It has also said it plans to continue investing in technology throughout its business, particularly for on-boarding and training of merchants and will also enhance its ‘phygital’ delivery model.

As of March 31, 2021, Fino Payments Bank had 6.41 lakh merchants, 17,269 active BCs and 25.7 lakh CASA accounts. It also operates 54 branches and 143 customer service points.

The bank had filed draft documents with market regulator SEBI for an initial public offer in July this year. It is looking to raise about ₹1,300 crore, including a fresh issue of ₹300 crore as well as an offer for sale component

Since the beginning of the Covid-19 pandemic, the lender has also seen high levels of transactions through micro-ATM, AePS networks and BC banking operations also received an impetus with increased transactions.

Decline in domestic remittance

In its DRHP, the bank however, noted that there has been a significant decline in domestic remittance transactions as migrant workers relocated from urban areas to hometown. Although its remittance transactions have largely recovered since the initial outbreak and lockdown, it currently remains approximately six per cent below its typical domestic remittance throughput.

Its CMS temporary operations were also impacted due to moratoriums on lending and reduced cash handling requirements. But as the lockdowns eased, this has quickly returned to normal transaction levels.

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