RBI Grants In-Principle Nod for Fino Payments Bank to Become a Small Finance Bank

The conditional clearance begins a licensing process that requires further compliance before operations can expand.

Overview

Fino does not become an SFB immediately, with a final licence to be issued only after it meets the regulator’s requirements.
Fino applied under the RBI’s on-tap framework in October–December 2023, which permits resident-promoter payments banks with five years of operations to seek conversion.
Media reports say this would be the first payments bank in India to transition to an SFB.
Post-conversion plans include small individual loans under Rs 50,000 and secured lending to micro, small and medium enterprises.
Recent context includes a SEBI disclosure-lapse settlement and an RBI penalty, a 27.5% Q2 FY26 net profit decline to INR 15.3 crore, and a 3.88% rise in the share price on the day of the announcement.