Fino Payments Bank net revenue rose 26 per cent to ₹118 crore
The Reserve Bank (RBI) today granted ‘in-principle’ approval to Fino Payments Bank for conversion into a Small Finance Bank (SFB). businessline was the first to report in August that the regulator will likely approve Fino’s request for SFB conversion.
The RBI had issued the guidelines for ‘on tap’ licensing of SFBs in the private sector. Per the norms, existing payments banks which are controlled by residents and have completed five years of operations are eligible for conversion into SFBs. The application of FPBL was assessed as per the procedure laid down in the guidelines, the regulator said.
Earlier this year, the RBI granted in-principle approval to AU SFB to convert into an universal bank and returned the application of Jana SFB to convert into an universal bank. Ujjivan SFB, too, had applied for universal bank license and its application is pending with the regulator.
With Fino’s exit, there are only few operational and large scale payments bank in the country. These include Airtel Payments Bank, Jio Payments Bank and India Post Payments Bank. Paytm Payments Bank was barred by the RBI from accepting fresh deposits and conducting any new activity due to material violation of regulatory norms. The ban, imposed in 2018, continues to exist till date.
The payments bank model came into being essentially to aid underserved population in hinterlands conduct transactions. However, with rising digital transactions, and the RBI’s rules that say payments banks cannot lend and cannot accept more than ₹2 lakh from each depositor, experts say the model is no longer sustainable.
“When the idea was conceived, it was clear the these entities will make money out of payments and remittances. That is the reason they were allowed to accept only ₹1 lakh as deposit from each customer, whose limit was later raised to ₹2 lakh. But after that model was introduced, demonetisation came into effect, UPI transactions perked up, digital transactions rose as per government’s guidance,” former RBI deputy governor R Gandhi told businessline in a previous interaction.
“So, the revenue model is now flawed for payments bank, there is no money there so how will they succeed. Payments banks cannot sustain in their current state. They must be allowed to convert into a SFB,” he added.
“This approval provides Fino, an opportunity to realise its growth potential by expanding product suite, engaging with a wider customer segment, foray into lending and building a strong liability franchise thereby creating significant value for all stakeholders,” said Rishi Gupta, MD and CEO, Fino Payments Bank.
Fino will continue to leverage its asset-light, distribution-led network while investing in technology, data and partnerships to build scale.
Published on December 5, 2025
