Fino Payments Bank logs 80 pc plunge in domestic remittances

Fino Payments Bank said it has seen an 80 per cent decline in domestic remittances volume as migrant workers have returned to their homes following closure of small businesses due to the nationwide lockdown.

The payments bank sees average monthly remittances of close to Rs 5,000 crore from daily wage earners working in various factories, construction sites, small businesses, plumbers, carpenters, cab drivers, among others.

Retail remittances at the industry level have also declined by 80 per cent amid the current lockdown.

"Our average monthly domestic remittances is around Rs 5,000 crore but now it has come down to 20 per cent post the lockdown," its Chief Business Officer Ashish Ahuja said.

The payments bank has around two lakh banking points, with close to 80 per cent of its network present in rural areas.

Ahuja said the 20 per cent remittances are being done by those who are working with small businesses engaged in providing essential services and also by beneficiaries of government grants.

"People who are even out jobs but receiving some amount of grants from the government are also utilising some amount of that money to remit to their homes," he said.

Last month, the government had announced direct benefit transfers to provide relief to underprivileged who are affected the most due to the ongoing lockdown.

Under the package, all women having Jan Dhan bank accounts would get one-time cash help of Rs 1,500 spread over three months.

Banks started depositing the first instalment into the beneficiary accounts starting April 3.

The relief package also included advancing the payment of one-third of the Rs 6,000 a year pre-2019 general election cash dole scheme for farmers and government contributions to retirement funds for the next three months of small companies with 90 per cent of staff earning less than Rs 15,000.

Ahuja said there is a spurt in transaction through the Aadhaar-enabled payment system (AePS) following the announcement of government grants.

"Because of the government schemes, we are seeing huge outflows of money through AePS. Though the transaction size has come down by 50 per cent, the average number of AePS transactions that are happening are about 3.5 lakh per day," he said.

Ahuja expects volumes in domestic remittances to take another six to nine months to bounce back fully.