'Payment banks' micro-lending to significantly impact economy'

'The transition from payment banks to SFBs is only permissible for banks not owned by corporate entities.'

Airtel Payments Bank saw a fivefold growth in online applications from FASTag users in the fourth quarter (Q4) of 2023-24 (FY24) compared to its third-quarter (Q3) average.

Anubrata Biswas, managing director and chief executive officer of Airtel Payments Bank, discusses the quarterly results and future prospects with Harsh Kumar/Business Standard.

Following Paytm Payments Bank's exit from the FASTag market, what kind of gains have you observed?

We experienced a fivefold increase in online FASTag applications in Q4FY24 compared to our Q3 average.

In April 2024, we saw over 1.5 million monthly active FASTag users conducting transactions, bringing our total FASTag user base to over 3.2 million.

What is your stance on allowing payment banks to engage in small-ticket-size lending?

Around two years ago, the Payments Council of India submitted a proposal to the Reserve Bank of India advocating for payment banks to be permitted to engage in micro-lending.

The potential impact on India's economy would be substantial and significant.

How did Airtel Payments Bank perform in FY24?

We achieved a 60 per cent increase in annual net profit, reaching Rs 35 crore, while our revenue surged by 42 per cent to Rs 1,836 crore in FY24.

Our monthly active user base grew to 80.4 million, resulting in customer deposits reaching Rs 2,801 crore, a 50 per cent annual growth.

Our gross merchandise value reached Rs 2.5 trillion. This growth can be attributed to our expanding portfolio of businesses and increased adoption of our digital offerings.

What initiatives are you undertaking on the digital front?

We are currently the largest business-to-business micro-cash player in the country.

Last year, we were opening around 800,000 accounts per month, reaching the milestone of 1 million accounts in March. We've seen a surge in growth since January.

Recently, you launched a soundbox for merchants. Are you venturing into Paytm's market space with this product?

The core philosophy of Airtel Payments Bank revolves around addressing consumer needs through differentiated product offerings.

For merchants, we identified a need to facilitate payment acceptance, provide confirmation of received payments, and offer a convenient overview of transactions and current account balances.

The soundbox addresses these needs. We're seeing strong traction, with hundreds of soundboxes sold daily.

The real challenge lies in catering to the vast market of 40-50 million merchants, similar to the opportunity presented by digital banking for 100 million users.

Do you have plans to transition into small finance banks (SFBs)?

We are ineligible to apply for SFB status as we are a corporate-owned bank under Airtel.

The transition from payment banks to SFBs is only permissible for banks not owned by corporate entities.

Feature Presentation: Aslam Hunani/Rediff.com