Zerodha boss Nithin Kamath.
Kamath, the CEO and co-founder of India’s leading brokerage Zerodha, said fintechs in India face the real competition from
the branches of all banks.
This is because each branch of a bank sells multiple products from loans to investments to insurance and much more.
“HDFC Bank opening 4 new branches daily last year is phenomenal. As counterintuitive as it sounds, I think the real competition for most fintechs in India is the branches of all banks,” he said.
Paytm chief Vijay Shekhar Sharma had also earlier taken to Twitter to share his views on HDFC Bank’s branch opening spree.
“Everyday, every saturday/sunday or rainy day/ sunny day, even on every holiday. On average, they opened one branch in 6 hours. IMO this is the most ambitious retail expansion in the country,” Sharma said.
Kamath, who is known for his educational tweets on all things stock markets and finance, further said digital-only presence may not help in expanding market share beyond a certain threshold, other than small-value consumer loans and payments.
“You need physical presence and human advisory in a diverse market like India. This will probably also lead to better outcomes or people doing better with their money if the human advising isn’t conflicted due to an incentive to sell certain products,” he added.
As Zerodha thinks about the next phase of growth, Kamath said there is a realisation about the importance of physical presence in an increasingly digital world.
Recently, Zerodha AMC, which is being built in partnership with fintech platform smallcase, has received final approval from the regulator to launch the fund.
The company is likely to come up with a mutual fund product within 2-3 months of getting the final nod.
The fund house aims to be index-only and create simple funds and ETFs that all investors can understand and put their money towards all their goals.
Bengaluru-based smallcase hosts baskets of stocks or ETFs on its platform and Zerodha is one of the investors in the startup
