Fino Payments Bank on course to submit its readiness to RBI on transitioning to a SFB by Q4FY27, says Interim CEO
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Fino Payments Bank is enhancing its governance framework to support its transition to a Small Finance Bank.
Fino Payments Bank Limited (FPBL) is making steady progress and remains on schedule to fulfil the RBI’s requirements for shifting to a Small Finance Bank, said Interim CEO Ketan Merchant.
Key Takeaways
- Fino Payments Bank remains on track to submit its Small Finance Bank (SFB) readiness to RBI by Q4 FY27, says Interim CEO Ketan Merchant.
- RBI gave Fino an in-principle nod to convert to an SFB on December 5, 2025, under its on-tap licensing rules for resident-owned payments banks.
- Fino has engaged PricewaterhouseCoopers and technology partners to build out its lending platform and operational readiness.
- The bank is strengthening its governance framework with new policies and operating procedures to support the transition.
“We anticipate completing all necessary milestones within the 18‑month window and plan to submit our readiness to the RBI by the close of Q4 FY27,” he added.
On December 5, 2025, the Reserve Bank gave FPBL an in‑principle nod to become an SFB. According to the RBI’s on‑tap SFB licensing rules for private entities, payments banks that are resident‑owned and have operated for five years qualify for conversion.
“We have engaged PricewaterhouseCoopers to assist with implementation and overall operational readiness for the SFB, and we have partnered with technology providers for our loan origination, loan management and other lending applications that will underpin our lending platform,” Merchant noted in a recent analyst call.
In parallel, the bank is bolstering its governance framework by establishing the necessary policies, operating procedures and compliance processes to support the SFB transition.
Meanwhile, the technology stack that will enable the full customer loan journey is under development and slated for completion by February 2027.
“Our emphasis lies on the retail segment, customer acquisition and referral lending, and we are making steady progress in each area as part of a deliberate strategy aligned with our SFB transition.”
“Our capital base remains well above the regulatory threshold (minimum paid‑up voting equity share capital or net worth of ₹300 crore) required for the proposed SFB,” Merchant said.
FPBL’s interim CEO stressed that the bank aims to create a differentiated SFB built on three enduring competitive strengths.
“First, a strong liability franchise provides a structural edge in funding costs. Second, a predominantly secured, asset‑light lending model backed by a network that reaches over 95 % of India’s pin codes facilitates efficient customer acquisition, disciplined underwriting and scalable growth.”
“Third, a technology‑driven operating platform centred on Finacle, AI‑enabled lending and a solid digital infrastructure will drive innovation and operational efficiency,” he said.
Interim CFO Anup Agarwal noted that the bank’s low cost of funds reinforces its liability franchise and is projected to yield roughly a 300‑basis‑point advantage over other small finance banks in the future.
Published on August 28, 2026
