FINO PayTech intends its payments bank avatar to reach the unserved and underserved. Rishi Gupta, CEO & MD, of FINO PayTech believes his company’s track record in financial inclusion gives it an upper hand over other prospective payments banks.
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In 2006, when the Reserve Bank of India (RBI) issued guidelines allowing banks to employ business correspondents (BCs), it not only gave them a strong tool to work with, it also empowered the largely marginalised customer. BCs could carry out a range of services and transactions on behalf of banks for a wider consumer base, getting a commission for this service.
FINO PayTech was incubated as such a BC by ICICI Bank in July 2006—with a seed capital of Rs 15 crore—out of Navi Mumbai. The acronym FINO stands for Financial Inclusion Network & Operations, and financial inclusion is what took this freshly-minted BC to the bustling Chandni Chowk market district of Old Delhi soon after.
Fresh from its first project of opening accounts for slum dwellers in Mumbai, on behalf of Union Bank of India, a FINO team had gone to Delhi to explore business opportunities.
A chartered accountant by profession, the 47-year-old Rishi Gupta was roped in by ICICI Bank as FINO’s chief financial officer and president (sales) in 2006. He came from a three-year stint at International Finance Corporation in New Delhi, having worked on budgeting and project finance. Manish Khera, a senior ICICI banker, had founded FINO and was CEO till he quit in 2013. He thereafter briefly worked at FINO’s now rival Airtel Payments Bank before taking up other entrepreneurship ventures.
FINO, along with 40 other firms, had applied to RBI for a payments bank licence and, last August, the central bank gave ‘in-principle’ approval to 11 companies, including FINO. It will now submit an application to the RBI for final approval—they have till March 2017 to set up the bank. They would need to disclose details of the payments bank’s equity structure, its investors, the head of the bank and a detailed business plan including rollout of operations.
It also has a strong roster of investors, including The Blackstone Group with a near 20 percent stake, ICICI Group (15 percent), Intel Capital, Headland Capital Partners, IFC, Indian Bank, Life Insurance Corporation of India (LIC), Union Bank of India and Corporation Bank. FINO has raised capital four times between 2007 and 2011.
Source: Cover Story in Forbes India 19 August 2016 issue