Payment banks in India began earning profits in the last financial year for the first time as the rise in interest income exceeded that of interest expenses, the Reserve Bank of India said on Wednesday.
Out of six operational payment banks, five were profitable in 2022–23, the RBI said in its report on the Trend and Progress of Banking in India.
"The consolidated balance sheet of payment banks recorded strong growth, notwithstanding a deceleration from 45.3% in 2021–22 to 30.1% in 2022–23," the central bank said. "Their growth still outpaced that of scheduled commercial banks and small finance banks."
The return on assets and return on earnings—the key profitability indicators of a bank—also turned positive at the end of the last fiscal after declining for three consecutive years. The net interest margin, another indicator of profitability and growth, increased to 3.7% as of March 31 from 2.3% a year ago.
"Over the years, the cost-to-income ratio of payment banks has been declining, suggesting improved efficiency in their operations," the RBI said.
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