Fino Payments Bank Becomes First Payments Bank to Receive RBI’s Approval for Conversion into SFB

In December 2025, the Reserve Bank of India (RBI) granted in-principle approval to Fino Payments Bank Limited (FPBL) to convert into a Small Finance Bank (SFB), becoming the 1st Payment Bank(PB) in India to get such approval.

• This conversion will enable the FPBL to accept larger deposits, provide loans, and credit facilities to individuals and small enterprises, and expand its customer base and services.

Key Details of Approval:

Background: FPBL, which was operationalized in 2017, had applied for a SFB license in December 2023.

Approval Granted Under: Fino’s application for SFB license was examined under the ‘On Tap’ Licensing of SFBs in the private sector, aimed to promote financial inclusion and competition.

Additional Condition: Also, the conversion of branches of PB into SFB branches will be done as per the stipulations in the RBI (Small Finance Banks-Branch Authorisation) Directions, 2025.

SFB League: With this conversion, Fino will join a list of 11 existing SFBs: AU SFB, Equitas SFB, Suryoday SFB, Utkarsh SFB, Jana SFB, Unity SFB, Capital SFB, ESAF SFB, Ujjivan SFB, Shivalik SFB, and Slice SFB.

Eligibility Criteria for Conversion from PB to SFB:

Eligible Applicants: As per RBI’s ‘on tap licensing’ norms, existing payment banks which are controlled by residents and have completed 5 years of operations are eligible  to apply for conversion into SFBs.

Capital Requirement: PB interest for conversion into a SFB, is required to maintain a minimum net worth of Rs 300 crore, or,

• It is required to infuse additional paid-up voting equity share capital to achieve net worth of Rs 300 crore within 18 months from the date of receiving in-principle approval or as on the date of commencement of operations, whichever is earlier.

CAR: It is mandatory for a SFB to maintain a minimum Capital Adequacy Ratio (CAR) of 15% of its Risk Weighted Assets (RWAs) on a continuous basis, subject to any higher percentage as may be prescribed by RBI from time to time.

Shareholding: Promoters are required to hold a minimum 40% of paid-up voting equity for the 1st 5 years.

• In case, the promoter shareholding exceeds 40% initially, then, it must be reduced to that level within 5 years.

Branches : Also, it is mandatory for an SFB to open at least 25% of its branches in unbanked rural centres.

About Fino Payments Bank Limited (FPBL):
Managing Director (MD) and Chief Executive Officer (CEO)- Rishi Gupta
Headquarters- Navi Mumbai, Maharashtra
Established- 2017