Constratio

Team Strategizers

Harshit Kumar
PGDM

A Glimpse of Whats
Inside

Henna
Wadhwa
PGDM

1.Indian Financial Industry

2. PTM Entry as payment bank
3. Companys resources and
capabilities
4. Challenge and opportunities
5. External Environment
6. Key business factors
7. Strategy a way forward

Shikhar Uppal
PGDM

www.companyname.com

International
Management
Institute,
New Delhi
2016
Jetfabrik Multipurpose Theme.
All Rights

Indian Financial Industry

The countrys financial services
sector consists of the capital
markets, insurance sector and nonbanking financial companies
(NBFCs)
Indias gross domestic savings
(GDS) as a percentage of Gross
Domestic Product (GDP) has
remained above 30 per cent since
2004

Source: Bank branches, Credit to GDP ratio: World Bank ATM: Secondary Research
PoS, Cards: CPSS Red Book 2012, Deloitte Analysis Credit to GDP ratio; World Bank

Source: https://www.rbi.org.in/Scripts/Statistics.aspx

There are currently approximately 600 million debit

card users and 22 million credit card users, roughly
constituting 50 per cent of the population, leaving the
remaining 50 per cent without debit/credit/net-banking
facility.

PTM- Entry as a payment bank

Vision :
Create a banking entity which is adequately capitalized, financially inclusive and has a competitive business model

Mission:
Widen the spread of payment services and deposit products to small businesses, low-income households, migrant labour
workforce etc.
Enable high volume-low value transactions in deposits and payments services in a technology-driven environment.

Financial Literacy
Create awareness
and ensure easy
access to financial
information and
services
Ease of Accessibility
Offer internet and
mobile banking
services and prepaid
instruments like
ATM & PoS etc.

Streamlining
Payments
Beneficiaries can
access incomes from
various government
programs
Financial
Inclusion
Reach the
under-banked
and lead India
to prosperity

Companys Resource and capabilities

Indias largest
mobile payment
platform
More users than
the total number
of credit cards
issued in India,
and is the
fastest-growing
mobile wallet
service
Large user base
of more than 20
million users

Payments
bank is an
extension to
its core
business
unlike
competitors
PTM already has
a established
technological
framework for
payment wallets
and marketplace
model

Business Model

Market Place
charges
commission from
sellers, Sale via
Website, Mobile
app

Payment wallet
PTM wallet for
mobile recharges
and bill payments

Mobile wallet
integration across

Challenges and Opportunities

Challeng
es
Limited customer ownership and
managing customer loyalty compared to
universal banks
Regulatory requirements
CRR and SLR(min 75%)
Investments in Government
securities only
Ensuring sustained profitability
Customer base is from excluded
segment
Cost of acquisition is high
Ticket sizes are small
Security
Competition
Lack of awareness

Opportuniti
es

Profitable sourcing and

deployment of funds

Launchpad for universal

banking business

Immense potential for market

expansion in rural areas

Greater innovation will help

produce and offer unique
products and services

Financial Inclusion

External Environment

Government
Initiatives

Pradhan mantri jan

dhan yojna, Banking
Correspondents, Ultra
Small Branches and
deployment of
Electronic Payments

Competition

Gaps

Technology

Indian Post
payment
bank(IPPB)

Low crisil inclusix

score of 40.1 is a
reflection of under
penetration of formal
banking facilities

Technology is the
backbone and plays
a central role
across all functions
and processes

Big telecom service

providers like Airtel
and Vodaphone
who have large
physical
distribution network
in rural areas

The bottom 50
scoring districts have
just 2 per cent of the
country's bank
branches

Target Geographies

Key Business Factors

Innovative Products
Target Customers
Unbanked Population of
around 230 million, living
in semi urban and rural
areas of India

Channel to connect
Target customer is not
tech savvy. 100 million is
still not connect digitally.

Source : CRISIL Inclusix Report

2013

Physical point of
connectivity becomes
crucial

Product differentiation
Coming with Innovative
products which caters
the need the of target
population

Experience in
payment related
products and services
Companies have prior
business in providing
basic payment services
Telecom companies, prepaid card players,
payment service
providers

Technology
Reach and customer
engagement
Lowering down cost
of transaction
Improving quality of
product

Size of the
company
Size of total assets,
market share,
number of ATMs,
customer base

Semi urban and rural

areas of Bihar, Assam,Strategy
West Bengal, Manipur,
Nagaland,
Chhattisgarh
0.5 billion BoP
population which lives
in aforementioned
targeted geographies.
Success depends upon
going beyond well
banked smart phone
carrying customer
Connecting to Feature
Phone as well as smart
Partnership with NGOs,
phone
CGAP etc. to reach,
connect, engage and
aware as more as
more possible rural
customer.
Nukkad Natak for
awareness and
learning perspective
and also to enhance
Credibility

A way forward

Traditional Banking
Product
Acceptance of demand
deposits
Issuance of ATM/ debit cards.
Payments and remittance
services
low cost internet banking
solutions
Non-risk sharing simple
Customised
Products
financial
services
activities
Special financial products for
like insurance, pension
daily
wage
workers,
products
and
mutualpoor
funds
farmers, vegetable vendors
etc.
Provide complete banking
solutions by acting as BC for
established banks and provide
credit and loans to needy.
Providing financial support to
SMEs and MSMEs sector

Widespread network either

through their branch or ATMs
or BCs or through network
provided by other.
45% of physical access points
will be present in rural areas
Opening of controlling office
for a cluster of access points
Tie ups with local kirana
store, hospitals, schools and
ecommerce platform
Partner with IT service
company like Infosys to
implement core-banking
solutions and manage the
integration of other key
systems.
Adhaar linked authentication,
KYC, focus on mobile

Assumptions

Financials

Assuming growth of 20 million consumer base to

100 million in 3 years
Assuming operational cost is 20% of total paid
up capital
Assuming one time network set up cost is 50%
of paid up capital
Assuming average deposit per customer is 5%
of maximum allowed limit
0.75% of total transaction amount is
transaction charge assuming return on
additional services is 0.05% of total amount
deposited
Assuming 10% of total consumer base is making one
transaction and assuming transaction amount is
10% of average deposit per customer

Revenue Resourses

Net return on Government Security and T bills which

is around 2%
Commission charged on remittance services and
transaction charges
Return on providing services as BC and selling other
non risk sharing financial product

Expenses and Cost

One time network set up expenses
Operational Cost
customer acquisition cost and maintenance
cost
Promotional Expenses