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

Overview

• Fino applied under the RBI’s on-tap licensing framework after five years of operations, with its application assessed per the central bank’s guidelines.
• The in-principle approval does not confer SFB status yet, and the bank must complete all regulatory requirements before receiving a final licence.
• It is reported to be the first payments bank poised to transition into a small finance bank, expanding beyond a transactions-focused model.
• Post-conversion plans include three credit products, featuring individual loans under Rs 50,000 and secured lending to micro, small and medium enterprises.
• Recent oversight and performance context includes a SEBI settlement of Rs 5.89 lakh, an RBI penalty of Rs 29.6 lakh, KPMG findings of 19 employees running unauthorised schemes, a 27.5% YoY drop in Q2 FY26 net profit to Rs 15.3 crore, and a 3.88% rise in the stock on the BSE.