STOCK MARKET BSE NSE

Airtel Payments Bank hopeful of break-even in FY22; logs surge in business volumes amid pandemic

The pandemic and subsequent lockdown curbs fuelled uptake as both rural and urban customers sought banking solutions closer home, opting for convenient and secure digital payment options.

Published: 04th July 2021 03:30 PM  |   Last Updated: 04th July 2021 03:30 PM   |  A+A-

Earlier this year, Airtel Payments Bank announced its customers will get an increased interest rate of six per cent per annum on savings account deposit of over Rs 1 lakh.

Earlier this year, Airtel Payments Bank announced its customers will get an increased interest rate of six per cent per annum on savings account deposit of over Rs 1 lakh. (File photo)

By PTI

NEW DELHI: Airtel Payments Bank has seen a surge in business volumes in FY21 as lockdown curbs and migrants heading back to villages spurred new accounts as well as transactions, and the company is eyeing a break-even this fiscal, a top official said.

Factors like growth in revenues, expanded scale of operations, and higher realisation per user from cross selling of products are expected to drive break-even in the current financial year.

The pandemic and subsequent lockdown curbs fuelled uptake as customers, both in rural interiors and urban cities, sought banking solutions closer home, opting for convenient and secure digital payment options.

The bank witnessed a strong traction for its diversified product offerings such digital payments, money transfers, insurance, direct benefit transfer credits, Aadhaar-enabled payment system and collection management services.

A senior company official, who did not wish to be named, said Airtel Payments Bank is "confident" of a break-even this year, having reached the "right level of scale" with its large base of users.

A mail sent to the company did not elicit a response.

Meanwhile, the official said the company has build an adequate infrastructure, backed by investments in technology, to serve consumers and hence fixed costs and incremental investments are expected to remain in check.

The current user base of 5.5 crore reflects a large distributed cost base across customers for the company, the official said noting that the losses too have nearly halved in Q4 of FY21, compared to the year ago period.

Losses for full year FY21 were at about Rs 420 crore, while the fourth quarter losses stood at nearly Rs 70 crore.

The company logged over 32 per cent growth in revenue at almost Rs 627 crore for FY21 from Rs 474 crore in previous fiscal.

COVID induced movement restrictions and curfews in different parts of the country had made it difficult for those living in villages as also migrants returning to their hometowns, to access conventional bank branches located some distance away to withdraw money.

Airtel Payments Bank - which has one of largest retail networks with over 500,000 neighbourhood banking points - saw marked increase in new accounts opening during the FY21, as transactions too rose, the company official said.

At present, one in six villages in the country is being served by Airtel Payments Bank.

The company expects the digital payment momentum to continue, even accelerate in coming times, the official said.

Earlier this year, Airtel Payments Bank announced its customers will get an increased interest rate of six per cent per annum on savings account deposit of over Rs 1 lakh.

The move, announced in May this year, followed Airtel Payments Bank becoming the first payments bank to implement an enhanced day-end savings limit of Rs 2 lakh, as per the Reserve Bank of India (RBI) guidelines.

The interest rate is at 2.5 per cent per annum for a deposit up to Rs 1 lakh.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp