Fino Payments Bank Gets RBI Nod to Become Small Finance Bank; Lending Operations to Start in 12–18 Months

Fino Payments Bank is preparing for a major transformation after receiving in-principle approval from the Reserve Bank of India (RBI) to convert into a small finance bank (SFB). The move will enable Fino to enter the lending business for the first time, expanding its range of financial services significantly.

Fino Payments Bank Gets RBI Nod to Convert into Small Finance Bank

Managing Director and CEO Rishi Gupta said, "Payments bank cannot do lending... so both from a liability point of view as well as from the lending point of view, it's a big change for us." Fino will continue to operate as a payments bank until its SFB licence becomes fully operational as per CNBC-TV18 report.

Fino Payments Bank Lending Operations to Begin in 12-18 Months

The bank expects its lending operations to start within 12-18 months, following restructuring and compliance changes. Gupta noted that the transition is likely to improve profitability, as the bank will earn lending margins and annuity income in addition to its existing revenue streams.

Focus on Deposit Growth and Liability Expansion

Initially, Fino plans to focus on growing its deposit base, supported by its extensive distribution and merchant network. Gupta said the bank's liabilities could increase four to five times over the next few years, providing a strong foundation for lending activities.

Credit-Deposit Ratio and Targets

Fino plans a credit-deposit ratio of 70-75% as it begins lending. Over the first 3-4 years after becoming fully operational as an SFB, the bank targets:

• A lending book of Rs 8,000-10,000 crore
• A deposit base of Rs 14,000-15,000 crore

Gupta added that the bank's business model will become more stable and predictable once the SFB journey is fully underway.

Fino Payments Bank Share Price Today

Fino Payments Bank currently has a market capitalisation of Rs 2,434.97 crore, though its shares have fallen more than 17% over the past year.

Fino Payments Bank Ltd shares closed today at Rs 274.60, down by Rs 40.10, marking a 12.74% decline as of 3:30 pm on 8 December. The stock opened at Rs 324.00 and reached a high of Rs 324.00 during the trading session, while the intraday low was Rs 271.25.

Over the past 52 weeks, Fino Payments Bank Ltd has recorded a 52-week high of Rs 366.80 and a 52-week low of Rs 200.00.

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