Customers of Fino Payments Bank will be able to receive remittance money sent from overseas as it has been granted approval by the Reserve Bank of India (RBI) to offer the international money transfer service.
Fino Bank has received the RBI approval to commence the international remittance business under the Money Transfer Service Scheme (MTSS), the bank said on Monday.
The lender will undertake inward cross-border money transfer activities in association with an overseas principal, the details of which are being worked out.
The customer segment of Fino Bank at the middle of the pyramid is targeted to families of many of the people working in foreign countries, Fino Bank said.
The money remitted by family members abroad can now be directly withdrawn at the nearest micro-ATM or Aadhaar-enabled payment services (AEPS)-enabled Fino Bank's neighbourhood merchant point.
"Continuous product innovation is one of the core pillars of our model. International remittance further enhances our transaction-based product offerings.
"We will be ready to offer the inward remittance services to our customers by Q1 FY23. In sync with our digital strategy to enhance customer experience, we will also look at having this product on our mobile application as well," Fino Payments Bank Chief Operating Officer Major Ashish Ahuja said.
Fino merchants provide services such as new account opening, cash deposit, money transfer, cash withdrawal via micro-ATMs or AEPS mechanisms, collect cash on behalf of various institutional clients, among others.
As a new offering, the international remittance will help augment the income of merchants and the bank leading to the strengthening of Fino's robust distribution network.
Ahuja said there is a major inward remittance corridor in states like Gujarat, Punjab, Kerala, Uttar Pradesh and Bihar.
"We already have scaled up our merchant presence in all these geographies. We are therefore confident that the new offering will gain traction quickly.
"We also expect to shore up more subscription-based saving accounts due to this initiative as customers would prefer to park the remitted money in a Fino Bank account itself," he added.
The payments bank said that going forward, it will be open to partnering with more leading money transfer operators (MTOs) to widen its horizon across different countries.
The bank said it also has plans to commence outward remittance services soon. Fino Bank's network of over eight lakh merchants across the country, as of September 30, 2021, provides convenience to access domestic as well as cross border remittances, it said.
Fino cited a recent World Bank report that said India is expected to be the largest recipient of remittances globally in 2021 with an expected receipt of US$ 87 billion.
This is expected to grow by three per cent in 2022 to US$ 89.6 billion as a large number of workers are expected to return to the Gulf countries, as per the World Bank.