Mumbai: The jury may be still out on the future of payment banks in India. However, Fino Payments Bank, which started operations in September 2017, is looking to break even in the next couple of years.

The entity expects its robust customer growth to continue even as it readies a host of services both on the liabilities and asset fronts as part of its strategy to diversify its revenue stream.

Fino Bank is now looking to leverage its partnerships and cross-sell more third-party products such as two and three-wheeler loans, affordable home loans and commercial vehicle loans, besides debt mutual funds.

At present, the niche bank facilitates gold loans and insurance products of partners such as ICICI Prudential Life Company, Exide Life Insurance and ICICI Lombard General Insurance.

Speaking to The Telegraph, Rishi Gupta, managing director and CEO of Fino Payments Bank, said the entity has tasted success in gold loans and insurance products. "We are opening 5000-6000 accounts per day through our branch and merchant network and we have already crossed 3.5 lakh accounts in the last four months. Our financial performance has been better than what we had anticipated. We are aiming to break even next fiscal at the holding company level and are confident that at the bank level, break-even will be achieved in the year after next," Gupta said.

The payments bank has been able to facilitate gold loans of around Rs 50 crore so far and the target is to reach Rs 100 crore this year. On the other hand, while distribution of insurance products has doubled over the last six months, some of the other products that has enabled it to grow its customer base include micro ATMs and Aadhaar-enabled payment systems.

In April 2015, the RBI had granted in-principle approval to 11 applicants to start payments banks. However, three players dropped plans to set up these banks.

While payments banks can accept deposits of up to Rs one lakh from individual customers, they cannot lend. They, however, can provide payment and remittance services and distribute mutual funds and insurance products of other entities.

Fino has 422 branches and more than 25,000 access points across 14 states, and partnerships are key to its business model. At the same time, a tight lid on costs by using technology is contributing to the bottomline.

"There is a notion that payment banks are unprofitable as it is largely transaction based. I don't agree. The success of a payments bank will depend on what business model it follows. If it relies only on transaction, it will not make money," Gupta said, indicating that these niche banks will have to offer various products and services to remain profitable.