Fino Payments Bank MD & CEO Rishi Gupta

Fino Payments Bank is ‘hoping’ to receive an in-principle approval from the Reserve Bank of India (RBI) for transitioning to a small finance bank (SFB) in a few months, MD & CEO Rishi Gupta told businessline.

“It has been more than 15 months that we filed for SFB application. There has been a lot of engagement with the RBI over the last few months as well. Accordingly, we are expecting an in-principle approval in the next few months, by next quarter hopefully,” Gupta said.

“This is a timeline which no one can give as there are multiple approvals that are required. The talks are positive in nature with the regulator, we are optimistic of getting the SFB license,” he added. The payments bank had applied for a SFB license with the RBI in December 2023.

Operations as SFB

Gupta said Fino already has a large distribution network and is moving its core banking system to finacle, which should aid SFB operations.

“We have lot of data around merchants and customers and digital active users. So our focus in initial years would be to leverage existing infrastructure. We will look to lend to our customers, merchants, explore secured and unsecured loans. Focus more on secured loans than unsecured,” he said.

“Having said that, I have always mentioned that lending is like a goods train. We will start with some products in different geographies and over a period of time, after learnings on business mix, we will take a call on introducing products relevant to our merchant and customer segment. I don’t think we will have a challenge on meeting PSL requirements after conversion to SFB,” he added.

Core business

As the payments bank awaits for the RBI’s approval, it is focusing on building its deposit franchise further in FY26. The payments bank is expecting to open around 30-35 lakh deposit account each year and growing average deposits by 30-35 per cent in the current fiscal. Its average deposits grew by 37 per cent year-on-year (y-o-y) to ₹2,116 crore in Q4FY25.

“Largely, our customers are using Fino for transaction banking services as we can accept only up to ₹2 lakh as deposit and cannot offer recurring deposit or fixed deposits. Once we get in-principle approval for SFB and migrate to a SFB model, we will start focusing on higher segment of customer and build a better liability franchise,” he said.

Overall throughput, meanwhile, is likely to rise to ₹5.5 lakh crore – ₹6 lakh crore in FY26 compared to ₹4.61 lakh crore in FY25.

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Published on May 7, 2025