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airtel: Airtel claims its payments bank arm is unicorn

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MUMBAI: Telecom giant Bharti Airtel has told investors that it believes its subsidiary Airtel Payments Bank (APBL) is a unicorn – a term used to refer to startups with over $1 billion valuation. The payments bank recorded its first full-year profitability at Rs 9 crore for FY22. Revenues went up by 50% to over Rs 941 crore for the fiscal.
Speaking to TOI, CEO Anubrata Biswas said that a key driver of profitability was the ability to onboard many customers at a relatively low cost compared to the banking industry. The payments bank has also built a large fee income pipeline from B2B (business-to-business) services, fees on transactions, customer subscriptions and interest spread. The unicorn claim was made by the bank’s management in a call with analysts.
“Our dream state is to be one-third bankers, one-third startup and one-third FMCG distributors. If we were to operate fully as a bank, we would not be able to scale up,” said Biswas. The other advantage for the payments bank is the distribution network of Airtel, which the bank has been able to onboard as banking correspondents. It now has five lakh banking points.
APBL is one of the six payments banks that are licensed. Although the RBI had cleared 11 applications, five had wound up. Of the six that hold the licence, only three other than APBL – India Post Payments Bank, Paytm Payments Bank and Fino Payments Bank – have significant operations. NSDL Payments Bank commenced operations in October 2018 but is yet to scale up. Reliance Industries-Jio Payments Bank is yet to launch its operations.



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