Fino Payments Bank has unveiled its strategic roadmap following a crucial regulatory green light, setting the stage for a significant transformation in its operations and service offerings.
Strategic Restructuring Post RBI Nod
The bank's Managing Director and Chief Executive Officer, Rishi Gupta, revealed that the institution plans to hive off its business correspondent (BC) arm. This move will coincide with its transition into a small finance bank (SFB). The Reserve Bank of India (RBI) granted an in-principle approval for this conversion in early December 2025. This regulatory milestone is pivotal as it will officially permit Fino to undertake lending activities after completing the necessary restructuring.
A Digital-First Model with Ready Scale
Gupta emphasized that Fino's approach differs from most small finance banks, which often originate from microfinance backgrounds. Instead, Fino's model is digital-first and transaction-led. The bank enters this new phase with a substantial existing customer base, which it considers a primary advantage.
Over 20 lakh (2 million) merchants and 1.6 crore (16 million) customers form this ready foundation. Notably, out of this vast pool, 60 lakh (6 million) customers are already active on the Unified Payments Interface (UPI). This extensive digital footprint allows the bank to layer new deposit and loan products onto pre-existing payment relationships, simplifying customer onboarding and engagement.
Funding Strength and Lending Ambitions
The bank is positioned with a strong and low-cost deposit base to fuel its future growth. Currently, deposits exceed Rs 3,000 crore, and they have been raised at an impressively low cost of under 2%. To maintain a stable Current Account Savings Account (CASA) base and ensure cheaper funding, Fino expects to mobilize between Rs 600 to Rs 800 crore annually.
With this financial backbone, one of the key post-transition goals is to expand secured lending products through its extensive merchant network. This strategy aims to leverage the deep relationships and transactional data within its ecosystem to offer tailored credit solutions, moving beyond its historic payments-focused operations.
The planned hive-off of the BC business and the focused push into secured lending mark a new chapter for Fino, as it leverages its digital prowess and massive network to compete in the broader banking landscape.
