Payments Banks Like Paytm, Jio, Airtel See Losses Climb To Rs 626 Crore In Aggregate

Payment banks, including Paytm, Jio, Airtel, Fino in aggregate saw their losses mount to Rs 626 crore in March 2019 from Rs 515.6 crore 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 PBs to break even as they expand their customer base,” said RBI.

Interest income of payment banks increased 45% to Rs 255 crore from a year ago, while other income (including commission on transactions) doubled to Rs 2,093 crore this year from last. There are seven payment banks currently operational in India, up from five the previous year.

Another positive was remittances through payment banks increased 23% to Rs 1.10 lakh crore from Rs 89,653 crore. 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,” said RBI.
UPI transactions increased to 499 million worth Rs 57,219 crore — accounting for 70% of total transactions. While e-wallets had only 18.6% of the total transaction pie, which includes transactions via NEFT, IMPS, other modes.

Payment banks saw their deposit base double this year to Rs 883 crore from Rs 438 crore. 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.

Operating expenses also rose sharply by 74% year-over-year to Rs 2,925 crore. The return on equity for payment banks worsened in the negative from 27.9% to 34% in 2019. “Despite improvement in net interest income and non-interest income, increases in operating expenses resulted in overall negative profits for payment banks in 2018-19,” said RBI.―Times of India