RBI Okays Fino Payments Bank's Conversion Into SFB

The Reserve Bank of India (RBI) has granted ‘in-principle’ approval to Fino Payments Bank Ltd. for its conversion into a Small Finance Bank (SFB), the central bank announced on Friday.
This is the first payments bank to transition to a small finance bank, enabling it to transition from its current payments bank model to a small finance bank structure. This should allow a broader range of banking services.
Fino Payments Bank, which started operations in 2017, had applied for small finance bank license in October-December 2023. The lender had applied under the 'on tap' licencing norms of the central bank, according to an RBI release issued in January 2024.
In July 2023, the bank's board had approved the proposal to transition into an SFB. After RBI's approval, Fino Payments Bank plans to introduce three lending products, including individual loans under Rs 50,000 and secured lending towards micro, small and medium enterprises.
According to the guidelines, a payments bank must have a minimum paid-up voting equity capital or net worth requirement of Rs 200 crore and must have completed five years of operations.
Notably, Fino Payments Bank is targeting a profit after tax of Rs 100 crore in the current financial year, according to Chief Executive Officer Rishi Gupta. He had stated that the conversion into a SFB will enable greater control over its product offerings and drive further growth.
"We are working on some renegotiation, working on other businesses, some new lines of business, some new products as we go down the year," the managing director said during an earlier conversation with NDTV Profit.
"Our target is to cross maybe Rs 100 crore of PAT this year with the full 25% tax incidence. So, we'll be focused on the PAT numbers, on the bottom line," Gupta had said.
He noted that the fintech firm continued to add between 1.5 lakh and 2 lakh merchants annually to its existing network of about 19 lakh merchants.
On the lending front, Fino Payments Bank is collaborating with non-banking financial companies to offer products like gold loans, microloans and affordable housing finance.
Fino Payments Bank, a subsidiary of Fino Paytech Ltd., is a technology-led, asset-light digital bank serving emerging India. Backed by marquee investors including ICICI Group, BPCL, Blackstone, LIC, and IFC, Fino operates a high-volume, low-cost model focused on financial inclusion. The Bank processed Rs 1.1 lakh crore in transactions in the second quarter of fiscal year 2026, which marks a 7% increase year-on-year, with 55% digital throughput.