The Reserve Bank of India (RBI) has provided in-principle approval for Fino Payments Bank to transform into a Small Finance Bank (SFB).

This move is anticipated to enable Fino to introduce lending services, which are currently limited by its payments bank license, pending further approval.

By transitioning to a small finance bank, Fino is expected to expand its range of financial services while maintaining and potentially enhancing its existing payment and deposit offerings. This transition aims to cater to a broader customer base and explore new lending opportunities.

Converting into a Small Finance Bank and Enhancing Customer Experience

In accordance with the official statement from RBI, this approval is expected to unlock Fino’s growth potential by allowing it to diversify its product offerings, reach out to a larger customer demographic, enter the lending market, and build a robust base of depositors. Additionally, this initiative will help in creating substantial value for all parties involved.

With this in-principle approval, coupled with optimized operational income, Fino can accelerate its lending operations while reinforcing its payment infrastructure. The bank will continue to focus on serving clients and users effectively within a dynamic market environment, ensuring compliance with relevant regulatory standards.

RBI has established guidelines for the ‘on tap’ licensing of SFBs in the private sector. Under these guidelines, Payments Banks controlled by residents and operational for at least five years are eligible for conversion into SFBs. Fino’s application was reviewed following these institutional procedures.

Fino Payments Bank secured RBI approval for international remittance services in 2022, allowing it to engage in cross-border money transfers with a partner bank abroad. The bank also obtained permission to collaborate with a global remittance service provider as an overseas principal.