Fino Payments Bank has received in-principle approval from the Reserve Bank of India (RBI) to convert into a Small Finance Bank (SFB), becoming the first payments bank in India to secure such authorisation. The approval comes nearly two years after Fino applied under RBI’s “on tap” licensing guidelines for private-sector SFBs.
Expanded Scope Beyond Payments Bank Limits
The conversion will allow Fino to offer larger deposit accounts, loans, and credit services to individuals and small businesses, marking a significant expansion from its current limitations as a payments bank. The move is expected to deepen Fino’s reach in rural banking, digital financial services, and small-ticket lending.
A payments bank becomes eligible for SFB conversion after completing five years of operations, subject to regulatory compliance. Fino began operations in 2017, meeting this requirement.
RBI Framework for Private Sector SFBs
“The application of Fino was assessed as per the procedure laid down in the guidelines,” the RBI said. As per regulatory conditions, an SFB must open at least 25% of its branches in unbanked rural centres, supporting financial inclusion and rural banking access.
Fino Eyes Lending Business Within One Year
Rishi Gupta, MD & CEO of Fino Payments Bank, said the approval reflects the company’s technology-led approach, compliance record, and commitment to digital banking for underserved users. Fino expects to begin its lending operations within one year of receiving final approval.
Strong Customer and Merchant Network
Fino serves more than 16 million customers through over 2 million merchants, covering 97% of India’s pincodes, with a deposit base exceeding ₹2,300 crore as of September 2025.
Once converted, Fino will join the list of 11 existing SFBs, including Ujjivan SFB, Jana SFB, AU SFB, Equitas SFB, and others. AU SFB has already received RBI approval to transition into a universal bank.
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