Payments banks — including those floated by Paytm, Reliance Jio, Airtel and Fino — saw their aggregate losses mount 21% to Rs 626 crore during fiscal 2019 from Rs 516 crore in the previous year.
“The limited operational space available to them and the large initial costs involved in setting up of the infrastructure imply that it may take time for payments banks to break even as they expand their customer base,” the RBI’s report on ‘Trend and Progress of Banking in India’ said.
Interest income of payments banks increased 45% to Rs 255 crore from the previous year, while other income (including commission on transactions) doubled to Rs 2,093 crore this year from earlier. There are seven payment banks currently operational in India, up from five in the previous year.
Another positive was that remittances through payment banks increased 23% to Rs 1.10 lakh crore in fiscal 2019 from Rs 89,653 crore in fiscal 2018. An interesting trend was “UPI taking over from e-wallets as the most prominent channel for inward and outward remittances in terms of both value and volume for payment banks”, the report noted.
The number of UPI transactions increased to 499 million, worth Rs 57,219 crore that accounted for 70% of total transactions. E-wallets had only 18.6% of the total transaction pie.
Payments banks saw their deposit base double in FY19 to Rs 883 crore from Rs 438 crore in FY18. These banks are not allowed to collect more than Rs 1 lakh as deposit from customers. They also saw liabilities and provisions nearly double to Rs 4,363 crore year-over-year. This pushed up total liabilities including deposits by 45% to Rs 7,114 crore from the year-ago period, the report said.
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