- Airtel Payments Bank reported a loss of Rs 338.8 crores in 2018-19
- The firm recorded a complete revenue of Rs 254 crore compared to Rs 160 crore last year.
- Airtel Payments Bank is competing with Paytm, Fino and IndiaPost.
Airtel Payments Bank reported a loss of Rs 338.8 crores before taxes in the financial year 2018-19, up 24 percent from the Rs 272.6 crore loss in the past fiscal year, according to filings with the Company Registrar accessed from the business intelligence platform Tofler.
Airtel Payments Bank is Airtel telecom’s main banking entity and provides clients with digital payments and savings services. In fiscal 2019, the firm recorded a complete revenue of Rs 254 crore compared to Rs 160 crore last year, a jump of nearly 59%.
However, for the year ending March 31, 2018, the earnings at the payments bank, the first to go live in 2016, experienced a sharp 69 percent jump at some 160 crores. In the past fiscal year, the bank’s earnings stood at about 95 crores, as per the RoC filings from the bank.
Since payment banks are not permitted to lend, they generate revenue from interest earned through deposits in securities approved by the government and present and fixed deposits in standard commercial banks. Airtel Payment Bank is competing with Paytm, Fino, and IndiaPost players. In addition, the bank provides other sources of income from transactional fees on remittances from clients and other third-party services.
Airtel, along with Paytm Payments Bank, India Post Payments Bank, Fino Payments Bank, and a few others, is one of the last surviving payment banks in the nation. His rival Idea closed his banking activities a few weeks ago. It is recognized that even India Post is looking for a license for a small finance bank.
The State Bank of India in its recent report said that Payment Banks (PBs) as a business was facing stress on both the asset and liability counts.
PBs face a blanket ban on any kind of lending on the asset side. They also can not accept deposits greater than Rs 1 lakh on the responsibility hand. Although PBs ‘ company is free of credit risk and faces comparatively reduced market risk, it is subject to operational and liquidity risk, “says Soumya Kanti Ghosh, SBI’s chief economist.
Airtel Payments Bank runs over 250,000 banking points (Airtel retail stores) network across 29 states. The bank pledged $440 million to invest in developing a pan-India banking network and digital payment ecosystem in January last year.