How to become D-Mart of Indian banking? By simple banking and keeping away from limelight…

D-Mart clearly is one of the most important stories of not just retail sector but even generally. The retailer not just served customers with amazing discounts and efficient service but also stayed away from all limelight. People only started noticing as it filed for IPO and then listed in a blockbuster fashion.

It is not as if only retailers want to be the next D-Mart. Firms in other sectors are aspiring to be D-Mart  in their respective sectors.

For instance, Fino payments bank wants to be the D-Mart of banking. This is quite a change as most want to be future Citibanks, HDFC Banks etc.

As Fino Payments Bank is set to start operations within the next two months, its CEO wants it to become the “D-Mart of banking”.

“The more you complicate it, the more expensive it gets…We are looking at simplicity, a focused customer segment, keeping operating costs low… Remittance, CASA (current and saving account) deposits, insurance, bill pay, recharge, etc will be our core businesses for now. Internally, I tell my people we should be the D-Mart of banking,” said Rishi Gupta, MD & CEO, FINO PayTech, which serves as the biggest business correspondent (BC) to various banks.

This is some attribute to the reatiler.

Further on FINO’s model:

Founded in 2006, FINO has over 78 million customers transacting at 28,000 touch points and 10,000 agents in nearly 500 districts across 28 states in India.

According to Gupta, the bottom of the pyramid is ready to pay for more services while the top of the pyramid are unwilling to pay.  “We are passionate about the big mass market as it has good potential. This customer segment is asking for more services and are ready to pay… People with an annual income between Rs 1-5 lakh is my mass market,” he said.

FINO’s target customers are low income households, small business owners, migrant workers, daily wagers etc, who send money to their families back home living in villages.

In order to expand the distribution, product and service channels, Gupta is tying up with players such as Bharat Petroleum, fintech players, NBFCs (non-banking finance companies) such as Reliance Capital, L&T Finance, more e-commerce firms apart from its existing partner Snapdeal and insurance partners ICICI Lombard for general insurance and ICICI Prudential and Exide for life insurance.

Profitable since 2010, FINO PayTech crossed revenues of Rs 320 crore in FY16. Currently, it does around 80 to 85 million transactions and handles around Rs 8,000 crore in cash through its platform every year. It has enrolled over 50 million people with banks of which 28 million are active.

Domestic remittance through urban Fino Money Marts and the retail networks are to the tune of over a million transactions every month at Rs 400 crore and annually close to Rs 5,000 crore.

Gupta said, “We plan to have 50 outlets per branch to allow payments to merchants so we are targeting about 20,000 access points with micro ATMs at the existing 400 branches (points) in the next 1-2 years, depending on the progress made.”

On restrictions of lending and not more than Rs 1 lakh deposits, Gupta says FINO is used to working with boundaries. “The restrictions were always known to me. With a (payment bank) licence, it has only become better operationally.

Will be interesting to see how this wannabe D-Mart of banking performs over the years.

One Response to “How to become D-Mart of Indian banking? By simple banking and keeping away from limelight…”

  1. kamrupablog Says:

    The profitability of a business model based on financial inclusion is the only concern.Perhaps this is the reason almost all payment bank license holders are taking time to start. If transaction and deposit limits are raised then its viability will be more but then financial inclusion will take a back seat.

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