Fino Payments Bank shares decline over 4.5% after important action from RBI; all you need to know

Last seen, the stock traded at ₹300.05 on the NSE, down 4.66%.

"The ‘in-principle’ approval also marks the first instance of a Payments Bank in India getting an opportunity to convert into an SFB. It is an affirmation of the strength and scalability of Fino’s lean operating model, consistent performance and high standards of governance," the bank said in its earnings release.

Terming the conversion to SFB as a natural progression, Rishi Gupta, MD & CEO, Fino Payments Bank, said, “The ‘in-principle’ approval is a historic and momentous occasion in Fino’s evolution journey. We are deeply grateful to the regulator (RBI) for reposing faith in Fino’s asset-light business model and its robust governance structure. The approval is a testament to our consistent performance, ability to take technology-led banking to the masses, promotion of digital payments and adherence to compliance and regulatory guidelines."

It provides Fino an opportunity to realise its growth potential by expanding its product suite, engaging with a wider customer segment, venturing into lending and building a strong liability franchise, thereby creating significant value for all stakeholders, the CEO added.

"The bank will continue to leverage its asset-light, distribution-led network while investing in technology, data and partnerships to build scale efficiently. For customers, this conversion will translate into more choice, greater convenience and a wider range of solutions delivered through Fino’s trusted phygital model," the press release said.

As of September 30, 2025, Fino served 16 million customers through 2 million+ merchants covering 97% of India’s pin codes, giving it one of the widest and most trusted last-mile networks in the country. During the mentioned period, the bank also had a deposit base of over ₹2,300 crore, with the cost of funds as low as 1.9%, a significant metric and potential differentiator in the long run.

Conversion plan and regulatory roadmap

Fino will now work closely towards:

• Meeting all conditions stipulated under the ‘in-principle’ approval

• Aligning capital, governance and structural requirements for SFB operations

• Preparing a comprehensive migration blueprint ensuring seamless continuity of all existing services during the conversion period

"The Bank will continue to operate as a Payments Bank until final approval is granted and SFB operations commence," the press release added.

Difference between Payments Bank and SFB

What is a Payments Bank?

A payments bank is a special type of bank created to promote financial inclusion by offering basic banking services.

What it CAN do:

• Accept deposits up to ₹2 lakh per customer;

• Offer digital payments, mobile banking, UPI, wallets, etc.

• Issue debit cards;

What it CANNOT do:

• Cannot give loans or credit cards

• Cannot accept NRI deposits

• Cannot issue credit products

• Can only invest deposits in safe securities like government bonds.

Purpose

To provide accessible, low-cost digital banking services to the underserved population.

What is a Small Finance Bank (SFB)?

A Small Finance Bank is a full-fledged bank focused on serving small businesses, low-income households, MSMEs, and underserved sections.

What it CAN do:

• Accept all types of deposits (savings, current, FD, RD)

• Offer loans (MSME loans, agriculture loans, microfinance, housing loans, etc.).

• Issue debit and credit cards.

• Provide full banking services similar to regular commercial banks.

Purpose

To expand credit access to underserved segments and promote inclusive growth.

About Fino Payments Bank

Fino Payments Bank Limited (a subsidiary of Fino Paytech Ltd.*) started its operations in June 2017 after receiving a final licence from RBI. It is a technology-led, asset-light digital bank serving emerging India and operates a high-volume, low-cost model focused on financial inclusion.

The bank processed ₹1.1 lakh crore in transactions in Q2 FY26, a 7% YoY increase, with 55% digital throughput.

The bank is India’s only listed payments bank and the first to record profits. It is also the only payments bank to achieve five consecutive years of profitability.