Fino Payments Bank awaiting inputs on SFB licence from RBI, says CEO Rishi Gupta

Fino Payments Bank awaiting inputs on SFB license from RBI, says CEO Rishi Gupta

Fino Payments Bank, which had applied to become a small finance bank from a payments bank, is awaiting a response from the Reserve Bank of India (RBI), the bank’s chief executive officer and managing director (CEO and MD) Rishi Gupta said. “We had applied for the SFB licence in December 2023. We are waiting for inputs from the RBI for the application,” Gupta told Moneycontrol.

The RBI had in a statement on January 8 said it had received an application for an SFB licence. “During the quarter ended December 31, 2023, the Reserve Bank of India has received one application under the Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector dated December 05, 2019 from Fino Payments Bank Limited,” RBI said.

On July 28, 2023, Fino Payments Bank’s board approved the proposal for the transition into an SFB. The payments bank also stated that it has constituted a committee to explore the possibility of group corporate restructuring and evaluate its implications and other considerations.

For the fourth quarter of 2023-24, the bank reported a net profit of Rs 25.21 crore, up 14.2 percent from Rs 22.08 crore during the corresponding time a year earlier.

On a sequential basis, the company’s net profit rose 10 percent from Rs 22.80 crore in Q3FY24. The Mumbai-based payments bank’s revenue surged 24 percent to Rs 401.3 crore in Q4FY24 from Rs 323.43 crore in Q4FY23. Sequentially, the firm’s revenue grew 8.4 percent from Rs 370.2 crore in Q3FY24.

The company saw an uptick in its expenditure during the final quarter of the last financial year.

From payments banks to SFB

The bank, Gupta said, is currently working on the digital change for its transition from a payments bank to small finance bank. “We are rebooting our entire technology platform which at some time will take the SFB technology piece into it,” Gupta said.

He added that the bank is looking to tie up with large non-banking financial companies (NBFCs) for some products. “We are partnering with some big NBFCs for some big asset products so that we can understand the market better. And we are slowly building our team in the bank on the asset side,” Gupta highlighted.

A payments bank is a digital-first version of a traditional bank, with a specific focus on facilitating payment transactions. It is also a unique regulatory innovation established by the RBI to expand financial inclusion.

A customer can deposit up to Rs 2 lakh in their payments bank account. On the credit side, payments banks are not permitted to offer any lending services.